Is transparency still a concern for advertisers?

Agency trading desks remain an issue for many clients, but are their fears misplaced? Arif Durrani investigates.

Advertisers value it, agencies all lay claim to it, while Sir Martin Sorrell admits to being "troubled" by it. One of the enduring big issues for an increasingly programmatic media landscape in 2014 is trading transparency.

As everything becomes digital, automated trading promises speed and efficiency in advertising at scale.

Yet the ongoing debate about the opacity of trading desks continues to cause concern for those who actually pay for the service. And it’s far from just a UK problem.

A study by the World Federation of Advertisers found that 87 per cent of its members were unhappy with the level of transparency from trading desks; 54 per cent revealed they had been asked to sign separate agreements with their agencies limiting (among other things) the right to audit performance.

The WFA’s research concluded: "The central concern is that agency trading desks offer a new way to charge more for the same product, that the price that is paid for an impression can bear no relation to the price the media owner charged for it."

Advertisers also fear that the ability of trading desks to provide a new profit centre makes them vulnerable to making choices that are determined by the agency’s business interests rather than its client’s marketing goals.

The situation has not notably improved in 2014 – the only major difference is that all parties are now at least more up to speed and aware of the issues.

Caspar Schlickum, the EMEA chief executive of WPP’s Xaxis, appeared to sum up the mood at the big networks last month when he defended his business by saying clients need to get smarter about this area and that no-one is forcing them to use trading desks.

The argument goes: if you are in the business of selling audiences to advertisers, for a price that clients have agreed to pay, why do agencies need to disclose all of the costs of their own investment in the transaction? Clients may not know all the costs in the chain, but they see the high performance they receive.

So, is this good business sense or does the lack of transparency continue to be a cause for concern?

Take part in the poll below.....

 

YES Americo Campos Silva, global media manager, Shell

"Advertisers don’t like uncertainty and shouldn’t blindly trust intermediaries to do the right thing. Transparency of costs versus business outcomes will help make more objective decisions and deliver a better business performance."

 

NO Marco Bertozzi, president, audience on demand, EMEA, VivaKi

"Advertisers can ask questions about fees that will give them transparency. We have pragmatic conversations with advertisers, where we talk through fees versus value and make sure they are clear on where they stand."

 

YES Bob Wootton, director of media and advertising, ISBA

"There are serious health warnings and advertisers are right to flag them up. Are the ads served? Are they viewable by a human? Are they in a brand-safe context? While attribution is a young science, is the click real or fraudulent?"

 

YES Dan Chapman, head of digital, MediaCom

"We need transparency in ad quality, data usage – all the elements that drive great media solutions. Clients need to understand how partners are driving value and results, but it is the results that define success."

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