June 01, 2015

Suddenly, $13 Billion In Media Reviews. Coincidence?

For over ten years, the agency business has been the online advertising industry’s lapdog – irresponsibly exaggerating the effectiveness of social media marketing; camouflaging the abominable results of display advertising; and glossing over the fraud and corruption that have contaminated the web.

The web arrived just in time for agencies. Agency creative abilities were on the wane. Clients were questioning their strategic abilities. Consolidation had made them big, slow corporate behemoths. Margins were shrinking.

They needed something new and exciting to sell. The web was a godsend.

But the era of digi-cluelessness may be coming to an abrupt end. According to industry sources, over $13 billion in media billings are in review right now -- an unprecedented avalanche of client dissatisfaction.

According to Brian Wieser, chief analyst at Pivotal Group, 
“...the reviews announced in the last eight weeks alone amounts to $13 billion in annual media spending. This approaches amounts that might be awarded in a typical full year”
And one can't help but think that the ad industry's irresponsible pimping for the online industry is a contributing factor.

First, there's the kickback...oops, I mean "rebate"...scandal. 

Clients who've been asleep at the wheel for years are finding out that agencies have been buying online inventory with their money and passing the "rebates" on to themselves.

Then there's the issue of incompetence and/or fraud...oops, I mean "viewability"...in which 56% of online ads paid for by advertisers are never seen by a living human.

Then there's click fraud, and audience fraud...

The web is a cesspool of corruption and incompetence. Nobody knows what they're buying. Nobody knows what they're paying. Nobody knows what they're getting.

Agencies turned a blind eye. They bet big on it and have been fat and happy. But it could be that the winds are changing.

Is all this sudden review activity connected to the fraud, corruption, and mismanagement of online ad budgets?

Well, I can’t prove it, but let’s just say I don’t believe in coincidences. 


LeShann said...

What it is will make you even more depressed. One of the biggest motivations I see in the market for going into reviews is actually about wanting to find agencies that do the most digital work. The number one word clients have on their lips is digital. The second is innovation... Sorry, I actually meant it in one word, "digital innovation".

You wouldn't believe how little incentive there is for digital talents to become more integrated. The fastest way up is to have digital in your title at the moment (and increasingly so).

So no, it's not a coincidence, but it's not the coincidence you're hoping for...

aripap said...

I don't see any evidence this is caused by digital. It seems much more likely to me that the cause is the secular decline in television viewership, especially among the young, which is causing the overall effectiveness of the TV budgets to decline. This is also seen in the declining sales and marketshare of many traditional brands like Coke, McDonald's, etc.

Cecil B. DeMille said...

Are these digital media dollars? They may not know what the get for them, but clients are 100% on their ability to earmark funds for specific things. Seems we should know how many are for what.

Brian Jacobs said...

All the evidence points to these reviews being driven by a need to tighten up contracts to ensure transparency. Watch out for a more bespoke, flexible, multiple supplier approach with power leaving the large agencies; plus some movements towards certain in-house solutions. Indies also stand to do well.

The Truth said...

If "Nobody knows what they're buying. Nobody knows what they're paying. Nobody knows what they're getting." then how do you justify all the digital media your agency recommend to your clients?

Guest said...

aaaaaand you're wrong again.

read the original article and than come back to tell us how many times "digital innovation" popped out.

The Truth said...

Bob, why do you keep deleting my comments? It should be a simple question to answer. If you believe "The web is a cesspool of corruption and incompetence. Nobody knows what they're buying. Nobody knows what they're paying. Nobody knows what they're getting." then why does your agency sell it to your clients?

LeShann said...

Are you referring to the part where the one analyst quoted here (who would dare to doubt an analyst in the first place?!) reminds that "we wouldn’t want to assume that a marketer would simply put their account up for review in order to audit how their agency gets paid"? (right before he goes on, like any pundit, with assumptions).

Or the other analyst who thinks "advertisers expect their agencies to seamlessly collaborate with technology and content partners both within and outside the traditional holding group model"?

I work on media pitches all year around (not in the US, but on the second largest media market). Of course pitches are motivated by the desire to cut costs and get cleverer deal structures. Nothing new there. But I haven't seen pitches being motivated by digital fraud - at least not to explain the scale. The top of the agenda is digital 90% of the time, but not to cut it. The most common request we get is to provide insights and examples on digital innovations / trends. An agency that goes into a pitch without a solid digital proposal is dead in the water these days. I have seen massive clients go into review because they feel their agency wasn't "digital enough". I don't defend it, I work hard to contain it (many marketers throw the baby with the bathwater when it comes to traditional media, both client and agency side), but then again, neither do I condone anonymous trolling.

Jim said...

That's an interesting point LeShann - not digital enough. They're about to throw water on a chip pan fire maybe?

It really is medieval blood letting isn't it - we've not removed enough blood - let's take some more. Humm he died.

bob hoffman said...

The reason I delete your comments is that, like everything else, you are misinformed about this. I don't have an agency. I left the agency business over 2 years ago. I am sick of your persistent arrogance and stupidity. Pls troll elsewhere.

The Truth said...

So 2 years ago when you did have an agency, you weren't selling them digital then?

Guest said...

no, I'm referring to the original article as a whole. if you'd read it (which you clearly had not) you'd know it's got nothing to do with digital innovation. it's about something else - which is clearly stated about 4-5 times. Bob also clearyl states that he assumes.

besides, I don't give a rats ass what you do or work on or how often or how many times or how was being motivated to you.
the original article has absolutely nothing to do with you.

as for anonymous - call me Fernando if this makes you think you know me better or gives you a boner quicker than calling me a Guest.

LeShann said...

Don't worry, I have plenty of better nicknames for you.

Starsky said...

Sadly, I think you're right. I was recently working for a major UK advertiser with tons of TV spend, and a growing digital budget.

Their marketing effectiveness team A/B tested different ad media and concluded that all showed an impact on enquiries and sales except digital display and social media, both of which had negligible effects for the same equivalent campaign spend. Viewability and audience fraud were both cited as likely contributing factors.

An external speaker then went through the issues of agency rebates; response from the marketing director was "Well, I'm sure ours don't do things like that". They did.

It was proposed to stop all major digital spend and get to grips with the issues behind it's lack of impact. That was swiftly shot down. When I left, they concluded (with no evidence) that digital must be having an effect on brand, because the marketing director was convinced all that spend couldn't be entirely wasted. He was also convinced that lack of innovation by the agency must be the issue, not the medium itself, and certainly not his decision to invest eye-watering increases in digital because it had so much potential.

angus said...

I have a filthy, dirty admission to make.
I don’t think digital marketing is helping to sell stuff.

There, I’ve said it.

And now that I have, I can already hear the whining Toyota
Hilux of the Interactive State hysterically bouncing over the dusty berms towards
me as the beardy guy on the back cocks his RPG 7.

I fear there is no longer a place to hide in the open plan,
slightly more cost-effective agency spaces of Noho, Hoxton, Shoreditch,
Clerkenwell, or the newly Omnicom-annexed Southbank for an infidel such as I.

But then, do I really want to sell my soul to write mood
films and then call them adverts because that’s how the client sold it to her boss?

Do I really want to face yet another group-ideation circle-jerk
of game-changing, story-telling content as everyone absentmindedly FBs their friends from behind their MacBook Pros?

Do I really want to lavish a thousand billable hours of frame-by-frame
crafting into case study films that boast
of not creating a campaign, but a

Do I really want to squander even more billable hours
drawing up storyboards for user-invisible 234 x 60 pixel half-banners (when,
actually, it would take less time to come up with a proper idea for a
half-decent poster that could actually
be scanned by the real retinas of a gazillion commuter’s eyeballs,

Or an television commercial that, when done well, would doubtless
be remembered for considerably longer than the Planck time it takes a
Millennial to press SKIP on the YouTubes for an ill-advised RBS financial
product pre-roll?

Do I really have to defend any semblance of an idea by wielding
the light sabre of Web analytics and other faux-statistical trex that can be
measured in clicks, or likes, or hits (anything other than silly sales goals).

Do I really want to spend my evenings rubbing against pushy
craft-beer-addled yuppies hiding behind their peak beards in crowd-funded
experiential pop-ups in that famuuussss street under the micturated arches of Waterloo
Station... or try my hand at a
projection-mapped virtual skatepark on the AstroTurf of that totes deck ‘city’ made from repurposed
freight containers dumped across the road from Shoreditch House?

Do I?

Do I really need to “change my tomorrow” and get a hacker mind with an MBA in Geofencing,
coding (give me strength!), viral immersion or social labbing from Hype Island?

Does anyone really want to do any of this?

Of course they do.
Because they don’t know any better.

That is, until ad blockers really start to kick-in and cram
themselves into our bony little, lazy-client-pummelled bottom-lines.

Then we’re all going to have to hobble out of the shadows,
pick the cellophane off that layout pad with nails bitten to the quick (good
luck with that), and suck on our Pentel rollerballs as we try to remember how
we all once did A.D.V.E.R.T.I.S.I.N.G.

Angus Wardlaw is a freelance creative looking for work in any
proper advertising agency.

Yep said...

best comment ever made.