A lack of transparency in advertising will stifle the ‘outcomes’ era at birth
Opinion
Non-transparent policies dressed up as ‘outcomes’ delivery and measurement, wrapped up in bundled packages that only the agencies themselves understand and control, will not provide what advertisers need, writes Nick Manning.
Finagle’s Law holds that ‘the perversity of the universe tends to the maximum’ and today’s advertising industry proves it right.
We work in the persuasion industry, and we’re very good at persuading ourselves that some things are true when they patently are not.
One of these is that personalisation in advertising has actually happened to a greater extent than people claim, let alone the much-vaunted ‘mass personalisation at scale’ that filled conference platforms for a few years.
Just look at your own feeds.
Another example is the ongoing saga of the paradox of the programmatic marketplace, where many mouths are fed before ads are served, such that the original budget loses 30% of its value, paying people to optimise ad exposure and targeting, yet another 40% or more is lost in poor viewability, bad targeting, invalid traffic and other glitches.
So, what’s the point of paying all those vendors if most of the advertising doesn’t get seen, is shown to bots, or shown to the wrong people? They don’t pay the money back, and as they’re paid per impression, they don’t care what happens.
Perhaps most bizarrely, the entirety of the advertising market seems to be built on the false premise of instant performance, even though only a small percentage of the audience is in-market at any given time, assuming they even see, hear or pay any attention to the blizzard of ads being thrown at them between turning their phones on in the morning and off in the evening.
And that the best way to reach them is one at a time.
Another example. Some in the advertising industry have tried to persuade the people who fund it that there really is such a thing as ‘principal’ or ‘proprietary’ media that they have bought themselves, among other myths that hold sway.
Fortunately, advertisers aren’t that easily convinced, as the most recent evidence shows, and the likelihood of principal and proprietary media gaining significant traction in the years to come is looking increasingly unlikely.
The ‘outcomes’ false dawn
Another canard gaining ground is the dawning of the ‘outcomes’ era, announced as if the purpose of advertising was something else before.
The new business models being touted by agency groups of all kinds are to be partly paid on the basis of success, theoretically replacing agency revenue lost to automation with a share of the spoils when advertising works.
It’s probably not worth labouring the point that this is how it always worked, and that when advertising succeeded, advertisers spent more, and the agencies, media owners and their supporting cast earned more money.
However, in the new era, ‘outcomes’ are now the objective, and the agencies will focus on advertising success rather than on whatever they were focused on before.
But there’s a catch. In the new world, such success will come from packages of technology, data, media inventory, creators, influencers, sports, gaming, retail media and the alphabet soup of acronyms supporting them.
The issue here should be obvious to the odd Martian visiting our planet. In a multi-polar world where people’s attitudes and behaviour are formed by many influences, attribution is very hard.
So, what you really need is a root-and-branch view of how your entire marketing machine is working, how the cogs mesh, what the multiplying effects are, and what each element’s contribution is.
What you really want to know is “what did marketing do for my business incrementally, and how does this affect my brand and business valuation”?
And you need a data layer designed to prove this, across all relevant content and channel permutations.
This isn’t ‘outcomes’, and it sure isn’t about better click-through rates, cost-per-something, or a notional dashboard effect.
Full transparency is needed
Our visiting Martian would logically conclude that the best way to do any of this is to harmonise and unify it, use AI to make sense of the data torrent, organise outside of silos, and appoint an ecosystem of external partners to execute against the common goal of demonstrable business growth.
He would also recommend having an independent source of verification throughout the entire process to achieve proper accountability and governance.
He might also emit an extra-terrestrial guffaw at the idea that the agencies can be left to organise the smorgasbord of elements needed without full disclosure of the data and financial flows within the machine, and would find it laughable that they should earn hidden margins within the assembled machinery and self-reported ‘outcomes’.
Effectiveness is the purpose of advertising and always has been, and in a hideously complex web of influences on people’s behaviour, full transparency should be mandatory to have a chance of understanding what works, why, how and at what cost.
It is understandable that the agency groups want to own the process, mix the potions, report the results and bill accordingly, but there is an alternative.
They can design the most effective marketing mix in all its manifestations, build and run the data layer that AI enables, orchestrate and harmonise execution with maximum automated efficiency and contribute to results measurement and constant optimisation.
They may even thereby prevent Google, Meta, Amazon, TikTok and OpenAI from scooping the pool.
The wilful adoption of non-transparent policies dressed up as ‘outcomes’ delivery and measurement, wrapped up in bundled packages that only the agencies themselves understand and control, will not provide what advertisers need these days.
Some people think that transparency is about a procurement-led witch hunt on costs and fees. Maybe it was once, but now it’s table stakes.
Nick Manning is the co-founder of Manning Gottlieb Media (now MG OMD) and was chief strategy officer at Ebiquity for over a decade. He now owns a mentoring business, Encyclomedia, which offers strategic advice to companies in the media and advertising industries, and is the non-executive chair of Media Marketing Compliance. He writes for The Media Leader each month.