This is a free excerpt from the AdNews Monthly print magazine cover feature. Over the course of May we will serialise the feature into bite-sized chunks. To read the full article now download a digital version of AdNews or subscribe to the premium print edition here. You can also see this topic, and more within the Transparency issue debated at AdNews Live! Tackling Transparency.
Digital media is the fastest growing media channel with advertisers investing more each year in the many different areas that include display, search, video, social, mobile and elsewhere.
One of the benefits of digital is it allows advertisers to better target specific audiences and track how much consumers are interacting with ads rather than the audience measures that are used by other media channels.
Digital media has been sold as having a higher level of measurability, which, in theory, should provide marketers with more granular information on the results. It’s also typically sold at a much lower cost as advertisers buy an infinite amount of inventory on websites ranging from premium publishers to “grannies crochet websites”.
Google and Facebook have benefitted most from the move to digital and vacuum up more than 90% of digital media growth.
“What the digital world has done is create an unlimited amount of inventory, but no one can tell good quality from poor quality anymore, especially if they're all buying on cost,” Trinity P3 founder Darren Woolley explained.
“Every advertiser wants their agency to deliver the lowest cost per thousand, but what they end up buying is a tsunami of crap. When advertisers are absolutely focused on cost and not value or return on investment, these are the problems you'll have.”
One media owner told AdNews premium inventory is jumbled together with mid-range and a tail of low quality inventory, with trading desks able to make their money from the mid-range to low quality stuff to more than offset higher cost premium inventory.
“Premium publishers don’t want that - we become commoditised in the process. Premium publishers have got to take a stand and stop in-fighting,” the media owner warned.
“How do we create a pool where if you want to buy premium, brand safe content you’ve got to buy from these places?”
In the past six months, the two largest platforms for digital - Facebook and YouTube - have had their credibility challenged.
Facebook has admitted on several occasions it has misreported several metrics to marketers and YouTube has faced an advertiser boycott over brand safety concerns.
Facebook has also been in the spotlight over content appearing on its platform, including child pornography, and an horrific murder broadcast live on the site.
Above all of this, more marketers, are starting to question the ROI digital delivers and how success is being measured.
“Digital has stuck its neck out because its selling point was that it was the most accountable channel relative to other broadcast media. It was always seen and positioned in that manner. The flip side to that is they are now having the most pressure placed on them because of that ability to be so accountable and more transparent,” a senior marketing executive told AdNews.
“The whole industry has been asleep at the wheel on that point; it’s not as if it was one brand or one category. The whole market swung in that direction and now the whole market is either swinging back or being a bit more informed.”
One media owner told AdNews because Facebook and Google do not share the same level of data with Nielsen and other measurement bodies, including viewability standards, their metrics are not as detailed or consistent with the rest of the industry.
Woolley believes digital media would be far more accountable to its success if marketers marked media agencies not on how much they can drive down the cost of digital, but on the value they can deliver against marketing and business goals.
“Marketers need to move towards measuring and paying on value or return on investments, especially in the digital space,” Woolley said.
The “lazy” metric, he believes, undermines the process where most are using cost per thousand impressions (CPMs) to buy digital when it has little relevance to most marketing goals, such as driving brand awareness.
“There are so many different ways, but most people, advertisers and their agencies, have gone for the easiest metrics,” Woolley explained.
“CPM’s, likes, impressions … these are all incredibly superficial and have almost nothing to do with value or return on investment.”
Check out the entire Transparency Series here.
You can hear these subjects tackled at the AdNews Live! Tackling Transparency event on 27 June. Tickets are now on sale. Speakers include Tim Egan, regional product marketing manager at Facebook and Tony Bell, national digital sales director at The Guardian Australia. More to be announced this week. Early Bird discounted tickets are available until 26 May. Buy tickets now.
This article is part of a series on Transparency which originally appeared in AdNews in print.
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