Fraudulent agencies, dodgy DSPs: You’re killing our industry

 Atomic 212º CEO, Jason Dooris
By Atomic 212º CEO, Jason Dooris | 27 January 2015
Atomic 212º CEO, Jason Dooris.

I was sitting at an agency roundtable recently. You know the type: representatives from different outfits discussing the best approach for a common client. One staffer from a prominent media agency began pushing his company’s ‘top-of-the-line DSP’. On the surface this person was outlining the value proposition for the client, but it soon became clear what he was really saying: “My agency has given me a directive to funnel a percentage of our client’s money into DSPs, regardless of viable alternatives”.

I couldn’t believe my ears. Isn’t it our job to find the best media solution for our client, not the best result for our coffers?

Over and over again I see agencies pushing clients to DSPs, not because this is necessarily the best strategy for the client, but because the DSP is an agency-owned product, which brings higher margins into the business. That’s not to say DSPs are never the solution; but at times the agency to client sales process comes across a little… let’s say… grey.

Often the client doesn’t know any better. They hear about reduced costs per impression - a dubious results metric which is hardly a true measure of success - and think they’re onto a winner. But in actual fact the value of DSP display is usually overstated, and it rarely shows a direct dollar output. In other words, while the peddlers of DSPs often talk of ‘performance display’, the truth is that DSP display is recurrently no more than a platform for cheap and ineffective traffic.

Don’t get me wrong, DSPs have the potential to positively affect our industry. But at present the problem is with the glaring lack of agency transparency, not only regarding the true value of these channels but also the insane margins which prop them up. Agencies already charge retainers; they shouldn’t be charging a margin on top of the media fee on top of the retainer. Particularly when they are pushing clients towards DSPs for the very purpose of obtaining this margin, and especially when the client is often unaware how high the margin is and what exactly they are being sold.

I don’t want to lump all agencies into this criticism, but it is an industry wide issue.

This concern fits into a broader debate around decreasing trust in media agencies, particularly the larger network players with stringent profit targets imposed by offshore head offices. Recent news stories abound relating to agencies dropping their pants to win business, agencies fudging their numbers to retain clients, and agencies promising what they can’t deliver. The current confusion and misdirection surrounding DSPs only adds to this mistrust. It’s an unsustainable cowboy approach.

What is the solution? It may sound like a pie in the sky solution but, put simply, agencies need to be more open and honest with clients. We need to tell them exactly where and why we are charging them, and we need to be searching for quality relationships where the client understands our service beyond the mantra of lowest price possible. It’s time to be bold and say ‘this is our fee’, and if a piece of business is not profitable then we should turn it down. But most of all, if display is not the best option - which is frequently the case - we should not be pushing it to clients.

The cloak and dagger approach currently surrounding DSPs is unsustainable and unacceptable. There are plenty of better alternatives. The industry could instigate standardised regulatory practises. Or we could adopt white-labelling solutions, where we develop such technology on behalf of our clients. Or we could invest in moving DSPs away from the pure numbers game, and look into how we can use this technology to provide clients with more targeted and effective campaigns. Anything is better than the current state of affairs.

Let’s think long term people. We want DSPs to be the future of our industry, not another chink in its armour.

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