Exponential CEO Dilip DaSilva featured in Adotas on Transparency

  • June 22, 2017

Is Transparency The Answer To Achieving Accountable And Effective Marketing? The Answer May Surprise You

Recently, Proctor and Gamble called on the media buying and selling industry to get its act together and demanded transparency into the whole supply chain. When I buy Proctor and Gamble’s products, I don’t ask them for transparency into their supply chain. In fact, I buy their products knowing that I will get high quality products at competitive prices because I can choose between many competing brands.

Ad tech is also a competitive space, so why is our industry the only one where customers need supply-chain transparency? I believe the reason is that marketers and their agencies have often chosen to believe that efficiency will drive better results. A focus on efficiency means investing all your marketing through a single partner, like a trading desk or DSP, to reap the benefits of tactics such as execution simplification, deduplication, frequency control, viewability, and cost transparency. The argument for consolidating all spend through a single platform is that by eliminating waste you drive higher ROI and better results. But can focusing too much on efficiency result in less effective marketing?

The tradeoff when focusing on efficiency through consolidating spend via a single platform is that you end up with less competition, slower innovation and complacency. With fewer partners, it is harder to compare partners against each other and keep them accountable.

Agencies and marketers who choose efficiency over competition may have short-term gains, but will eventually regret that decision in the long-term. For example, several years ago, Proctor and Gamble decided to leverage Audience Science as their single platform, yet they recently abandoned the single platform strategy for multiple platforms. Agency holding companies like WPP decided to acquire their own tech stack, but it became challenging to keep up with the rapid pace of innovation from many ad-tech startups . All agency holding companies have used efficiency to rationalize consolidating spend with a reduced set of platforms. This may benefit the agency holding company, trading desk or DSP, and the cost-saving arguments may seem compelling to a marketer, but is it the most effective strategy for consistently driving the best results for a brand?

Competitive Marketing Will Consistently Beat Efficient Marketing

To remain top of mind and gain market-share over competing brands, brands need to constantly innovate. Innovation in ad tech moves quickly and how a partner performs depends on their evolving tech, algorithms, data and people. A partner that is a top performing partner one quarter may fall behind in subsequent quarters and others that may not have performed in the past may develop new algorithms or add new data to improve their performance significantly. And there are always newcomer partners with unique offerings that could drive better results. An agency that leverages the full breadth of competitive partners and startups to create a dynamic, competitive environment for the brands they represent, will consistently drive better results than an agency that focuses on efficiency and restricts their competitive environment.

Achieving A Competitive Marketing Environment

Leveraging partner competition to create a highly effective marketing machine requires creating a competitive environment that is both fair and transparent. By fair, all partners are measured on a level playing field, with a marketer clearly defining their objectives and selecting an attribution vendor that can accurately measure which efforts are directly impacting the brand’s desired end results. The attribution model is paramount. For example, an attribution model that does not align well with desired outcomes means that partners may focus on strategies that appear to drive results, but are not as effective. A common example is last-click attribution, which is notorious for rewarding partners who focus on lower-funnel retargeting strategies over upper-funnel prospecting strategies. Creating a level playing field means all partners have the same setup with regard to leveraging first-party data for optimization and targeting, and all partners are driving both lower-funnel retargeting strategies and upper-funnel prospecting strategies. When some partners are chosen for lower-funnel retargeting strategies, and others for prospecting, it results in an uneven playing field and undermines a key goal of creating a competitive environment.

Competition is further enhanced by providing transparency to partners into how they are performing relative to other partners. Providing all partners a daily or weekly scorecard that compares partners on end result performance along with details on budget, impressions, and other metrics will go a long way towards ensuring all parties are accountable and working as hard as possible for the brand.

In an ideal competitive environment, a marketer leverages four to eight partners and splits the total campaign budget into a test budget and a top-performer budget . The test budget is dedicated to testing all partners with an evenly split budget. The top-performer budget is allocated to one or two of the partners in the test pool that are consistently performing the best. If a test partner does well in a month or quarter, then they can participate in the top partner pool with their total spend incrementally increasing to ensure that they continue to drive similar performance at higher scale. The worst performing test partners should be rotated out and replaced by new partners. It is important to resist the temptation of reducing all spend to one or two top-performing partners. Although this may produce better short-term results, it reduces competition in the long-term, and does not provide a benchmark to constantly keep the top performers accountable and working hard to drive the best results.

I believe that the unusual requirement for supply-chain transparency in our industry is a result of agencies and marketers placing too much emphasis on efficiency. With a reduction in partners, marketers are unsure how to keep their partners accountable and hence, the need for transparency. Yet, does transparency equal accountability? Instead, marketers should singularly focus on driving end results, and can run a far more effective and accountable marketing strategy through leveraging a dynamic, competitive environment. If any partners are inefficient, serving too many impressions or non-viewable impressions to each consumer, or are taking too much margin, their performance will suffer relative to other partners. Competition is the most effective means to keep partners accountable, so why not leverage it to consistently drive the best results?