One of the striking features of today’s advertising world is that the advertisers are not always present when their interests are being discussed. There are many parties involved in today’s complex advertising eco-system, with multiple trading entities and content-providers, and they all rely on the continuing willingness of advertisers to carry on investing in advertising.
While there are several decades of history to suggest there will be several more, there has perhaps never been greater cause for doubt as to whether paid-for advertising will continue to fund its ever-hungry children. Or that there will be enough food for everyone.
The annual Global Marketer Week (GMW) held by the World Federation of Advertisers (WFA) is a reliable barometer of advertiser sentiment, and last week’s edition in Toronto raised several questions over the state of advertising today, and also its long-term sustainability.
The week comprises several sessions that analyse the ‘state of the nation’ from the advertiser perspective, summed up well by the President of the WFA, David Wheldon (CMO of RBS), in his overview . David’s call-to-arms invites advertisers to never lose sight of the need to build and protect great brands, but to recognise that the way to do this has changed for ever. And that the way that advertisers work with their media partners requires a radical rethink.
Most importantly, David exhorts advertisers to concentrate on outcomes, not delivery.
The conference day itself delivered its traditional diet of advertiser-led insights, notably by Raja Rajamannar, CMO of Mastercard, who pointed out that people today value experiences more highly than possessions, and the ‘Priceless’ marketing platform has, therefore, become much more than an advertising end-line and more a lifestyle positioning. Raja’s statement that ‘Brands should be loyal to people, not the other way around’ reminded the audience about customer-centricity, a point amplified forcefully later by Mark Adams of Vice Media in one of the stand-out speeches of the day.
And if the audience is less attuned to advertising, then traditional, paid-for advertising may no longer be the natural way to influence them. Branded and experiential content may replace advertising for some companies and help mitigate the tendency for people to avoid advertising.
However, perhaps the most surprising comment came from the ever-entertaining Ivan Pollard of Coca-Cola, who described how online advertising is not effective for Coca Cola’s brands according to their measurement of real return-on-investment (so, business outcomes).
It is tempting to think that Coke’s mobile-toting, social media-addicted, always-on customers would be an ideal one to reach with online advertising, but that assumption, among many others, may be wrong.
Last week also saw the release of joint Ebiquity/WFA research into how the world’s advertisers are feeling about online display advertising in the light of recent high-profile commentary on its shortcomings. The survey was conducted in March at the height of the ‘brand safety’ publicity and following Marc Pritchard’s pronouncements on the ‘murky’ online eco-system.
The survey shows that advertisers are continuing to invest in online despite multiple concerns. Two-thirds of respondents are planning to increase investment by up to 40% in 2018.
However, only 28% of respondents are satisfied with the measurement of online display, only 21% with its reporting and 21% with its performance. Some 90% of respondents are still very concerned about viewability and lack of transparency is still a major concern for 74%.
So advertisers are investing in a channel that they don’t especially regard as well-measured, and whose effectiveness may be unproven.
In fact, 72% of the respondents said that advertisers have over-invested in online advertising.
It is a paradox that advertisers are continuing to plough money into online display despite these concerns. This suggests that advertisers are having to chase their increasingly atomised audiences into a myriad of digital channels and devices and are not being successful.
The metrics currently being deployed are exposure-related, not business outcomes, and even the exposure KPIs being used are inadequate.
The advertisers’ propensity to carry on spending may not be sustainable; the world’s brands may start to redeploy investment into other ways to build brands and achieve the right business outcomes. The agency sector has to consider this possibility and develop new ways to retain clients or lose out. Agency revenue trends will change, and the GMW and the joint Ebiquity/WFA research showed that advertisers are more aware than ever of the value chain where excessive costs of service, delivery, and margin are harming online advertising effectiveness.
Another continuous undercurrent flowing through the GMW was advertisers’ reliance on ‘Large Digital Enterprises’ (notably Facebook and Google), and how the distinction between passive platforms and active content providers is not satisfying advertisers’ needs for stable, measurable, high-quality editorial environments.
The voice of the advertiser was loud and clear in Toronto last week. There is a lot of disquiet among their community about an advertising industry that is not working for them the way it should. They have other ways to build and protect brands that they may turn to if the advertising industry doesn’t listen to what advertisers have to say.