I swear when I wrote my Purchase Order blog last week I didn’t know about the upcoming Wall Street Journal front page story regarding a massive audit of advertising agencies by some of the biggest marketers in the United States.
The article, entitled Big Marketers Launch Audits of Their Ad Buyers, is a strong condemnation of the media buying side of the advertising industry, based on a report by K2 Intelligence. The report’s findings have convinced J.P. Morgan Chase to suspend its $250 million in annual media buying until a full audit of its agencies’ practices can be conducted. At the crux of the issue is the lack of transparency and suspicion that I referenced last week. Unfortunately, this type of situation and publicity casts dark shadows across all stakeholders in the marketing world.
This is not to suggest that all, or even many, media agencies are trying to hide something. Quite frankly, if a media agency makes money because it takes the business risk of commuting upfront to media buys and then reselling it to its clients, why should the client truly get the discounts the media agency achieved? Perhaps the issue is the client needs to look at whether it wants to buy from its agency or buy directly from the network. In fact, that is a big crux of the issue. Supporting that crux is the fact that most clients, even very sophisticated ones, don’t understand the issue.
I can’t blame them. It’s so coursing these days, and the era of online media has made it even more bizarre. Ownership structures, venture investments, and unique collaborations have blurred the lines beyond belief. They are only going to get more blurry. Digital platforms, as amazing as they are, are becoming increasingly hard to label. Are they media outlets? Advertising platforms? Video channels? Social hubs? TV channels? Movie producers? Journalistic guardians? All or some of the above?
Then when you add additional concerns, such as last week’s revelations that Facebook has been accused of over stating the average length of video watch numbers for the past two years, your head spins even further. Facebook responded to the accusations by changing the label of its video metrics. Maybe I am a sucker, but I believe Facebook meant no harm. It’s too smart of a company to pull a fast one, and it has too much to lose. Perhaps Facebook could look at how it communicates these issues, but I suspect it’s an unfortunate case of human error, proving once again that no matter if we want to turn the planet over to the robots, the machines are going to need us.
The challenge for all of us is to provide better numbers, information, and evaluation. The reconciliation of budgets isn’t just a financial matter. “Spend it wisely” were the words of one email from a client’s purchasing manager when she released a large Purchase Order. Her words were both a request and a command. I find that motivating.
“Spend It Wisely.” We all should obey that command. If you take a sponsorship from a large partner, invest it wisely. If you are in control of a client’s budget, do more than treat it like your own money. Treat it like it’s your child’s money. If you have an opportunity to consider alternative ways to build sales, do so. If you are wise, heed the word’s of IMI’s Don Mayo who in a September 26th memo to the industry regarding metrics stated clearly, “Do not allocate a sizeable amount of your marketing budget if you don’t have third party reliable facts (impressions/views link to ?!?!?). Not to mention bots.”
If we all “Spend It Wisely”, if we all measure what we spend, then maybe some of these issues will be solved. Perhaps even the words Creative Accounting won’t be considered a sham.