Downturn Opens Opportunities For Upside: Now’s The Time to Drive Value Through Your Digital Supply Chain
The businesses best placed to survive the current recessionary environment will be those that seize the opportunity to make every pound of expenditure work harder than ever before. And that’s perhaps truer for marketing and advertising than any other line on the P&L.
Smart advertisers will make use of this time of lighter business schedules and tighter financial pressures to comprehensively review their programmatic supply chain to ensure it is driving the maximum return on investment.
In contradiction to the adage “If it’s not broke, don’t fix it,” now is the time to dig into the elements and root out unnecessary layers, wastage and service costs.
The release of the Programmatic Supply Chain Transparency Study from ISBA, AOP and PwC caused a stir in the industry earlier this year, from its conclusion that only half (51%) of advertising spend goes to publishers, while 15% remains unaccounted for.
While this may sound alarming, it’s important to remember that publishers have never received 100% of budgets since agency fees, tech costs and other third party costs are always required to run campaigns. Publishers will always receive the target floor price they set.
Measure Value, Not Cost
The beauty of addressable advertising, which delivers targeted ads to the right individual, is that wasted impressions are significantly reduced. By leveraging data, advertisers can effectively engage audiences with the best lifetime value.
Achieving this nirvana may require premium agency fees and optimised adtech, but what’s crucial here is whether the fees paid to these parties represent value for money and whether genuine transparency is achieved. Deploying the optimal team and technology stack to deliver precision targeting and reduce wastage equates to more money going into working media.
In most walks of life, people know that the cheapest service rarely equates to the best. Yet all too often, the debate around media is about the unit cost, rather than the overall value delivered.
Some advertisers can be their own worst enemy, insisting partner agencies buy media at a certain price when that may not be the best impression to spend on. Buying cheap is no good if it is the wrong cheap. The incremental bottom line revenue delivered is the truest way to evaluate the investment into media and tech.
A Complex Supply Chain
The digital advertising landscape is confusing on the surface and there are more elements involved than most brands realise. Beyond partnering with an agency using a demand side platform (DSP) that talks to the publisher’s supply side platforms (SSP) to bid for an impression, a data on-boarding supplier is also essential to match first-party data profiles to targetable media segments.
This process is now increasingly dependent on a data management platform (DMP) or customer data platform (CDP) that sits between the advertiser and publisher, and requires specialist expertise to vet and deploy.
Ensuring quality within the supply chain also requires ad tech providers to measure viewability and protect brand safety by reading the context of every page and blacklisting any stories that are deemed inappropriate.
Most advertisers today do not have access to their own ‘seat’ at the table of the DSP through which they bid for space. Instead, brands are at the mercy of their agency to get them the best deal.
This is problematic because there is often a lack of transparency about what they are paying and what rules are being set within the DSP. As it is the advertiser’s money, they should also have ownership of the data and be able to port this to another agency or take it in-house should they choose.
There is a growing impetus for advertisers to gain access to their own DSP seat, so they can analyse their budget and understand exactly how it is being spent -- and measure the return on investment. Not all agencies will alert their clients to this option, but brands need to be aware that they can own the contract and choose whether to activate campaigns themselves or via an agency.
The demand side is just the start though. Savvy advertisers should also be investigating the sell side, as it’s only by looking at the platforms used by publishers (SSP’s) that advertisers can gain a holistic view of their spend and the results it’s driving.
Independent Auditing
This is where independent experts come in. There are obvious difficulties with vetting an ecosystem you’re part of, so many advertisers turn to consultants who can deliver an unbiased assessment. These independent experts must have a genuine understanding of the complexity of the supply chain so they can dig into how the supply side can be better optimised - this is generally called supply path optimisation (SPO).
It can be hard to benchmark what good value looks like since publishers use multiple SSP’s with complex rules around which providers get priority. Header bidding gave buyers more control over the most cost effective route to bid for publisher inventory.
Independent agencies can negotiate fixed low fee supply paths to bring transparency to determine what’s best for their advertisers. Here at Control V Exposed, we’ve learned that laying out the options openly for clients can cause short term tensions but yields results for both parties in the medium term.
For example, advertisers may not have thought about contracting directly with a DSP -- and very few will have sought to uncover the most efficient approach when it comes to working with SSP’s -- but the combination can be transformational.
Paid Media is The New CRM
Check to see that you’re getting good value because it’s the right thing to do for your stakeholders, not just because of the Covid-19 stresses, but to ensure that every advertising dollar has to be working as hard as possible.
Programmatic is fast on the path to becoming the de facto way the world buys media because it enables brands to do something they could never do before - leverage data about existing customers to target lookalike audiences and treat existing customers as individuals within paid media environments.
Media is fast becoming more akin to CRM and as inventory supply from traditional channels such as TV and OOH grows, advertisers will be able to use this data-driven way of buying across multiple channels. CTV in particular will see huge growth in the next 6-12 months so now is the time to get your house in order.
Once a brand has interrogated its supply chain, the foundations are in place to use media to communicate in more personalised ways with customers and future customers. But advertisers can only go on this journey if they are willing to lift the lid on their programmatic supply chain.
This is best done through an independent set of eyes but most crucially, the golden rule is to ignore the scary headlines, look beyond cost to determine value, and build for the future.