John McGee: Time to drag the dark side of digital ads into the light
The largest advertiser in the world has just called time on the opaque and complex practices that have dogged the digital advertising industry
When Marc Pritchard speaks, people sit up and take note. Like a modern day Delphic Oracle, his sage-like insights and views are pored over with great enthusiasm and analysed in minute detail by the global marketing and advertising community. Rather than calling it a shovel or a manual earth mover - as some marketers might be inclined to - Pritchard prefers to call it a spade.
As global marketing and brand officer for Procter & Gamble (P&G), the 56-year old Californian oversees some of the biggest brands in the world. Look around your kitchen or bathroom and there's a good chance you will find at least one of its many brands, including the likes of Gillette, Olay, Pampers, Head & Shoulders, Tampax, Fairy, Braun, OralB, Old Spice, Vicks and, that great divinatory device of choice for aspiring parents, Clearblue.
Founded 180 years ago by two immigrants - William Procter and the Enniskillen-born and reared James Gamble - P&G is now one of the largest manufacturers of consumer-facing brands in the world. The most recent full year's results for P&G showed that it clocked up sales of €61bn and profits of €9.81bn.
Presiding over a gargantuan advertising budget that was in the region of €2.8bn in 2016 as well as several hundred marketing agencies around the world, including several in Ireland, it's no real surprise that marketers and ad agencies hang on his every word. With a total of 65 brands, which were sold to over five billion customers last year, not only is it the biggest advertiser in the world but P&G is in many ways a global bellwether for all companies trying to sell their goods to increasingly fickle and often hard to target consumers.
So when Pritchard stood up to address the US IAB Annual Leadership summit in Florida two weeks ago, the room was all ears. By the end of his relatively short 3,000-word address, however, not only was the room gobsmacked but within hours his views on the problems dogging the industry had reverberated throughout the global marketing and advertising community.
After a fairly benign introduction, during which he emphasised the importance of and need for creativity in advertising, Pritchard launched a bombardment against what he called the "dark side" of the digital advertising industry, its lack of transparency and the growing problem of ad fraud, ad blocking and self-certified metrics from publishers such as Facebook and Google.
"We have a media supply chain that is murky at best and fraudulent at worst. We need to clean it up, and invest the time and money we save into better advertising to drive growth. It's time we come together, put down our finger-pointers and solve these problems - all of us - marketers, agencies, publishers, ad tech platforms, suppliers," he told his somewhat startled audience.
"We serve ads to consumers through a non-transparent media supply chain with spotty compliance to common standards, unreliable measurement, hidden rebates and new inventions like bot and methbot fraud," he added.
While he confessed that P&G was one of the first to embrace all the shiny new things that digital advertising promised and that, in the past, it accepted the "multiple viewability metrics, publisher self-reporting with no verification, outdated agency contracts, and fraud threats - with the somewhat delusional thought that digital is different and that we were getting ahead of the digital curve. We've come to our senses... and the jig is now up."
While he accepted some responsibility for allowing the issues go unchecked, particularly in relation to undisclosed rebates to media agencies, the company was "poring over every agency contract for full transparency by the end of 2017 to include terms requiring funds to be used for media payment only, all rebates to be disclosed and returned, and all transactions subject to audit."
But he also admitted that agencies need to be profitable too and that clients need to be mindful of this. "Having unprofitable agencies is not good business, and can lead to practices we don't want, so we're taking a closer look at matching fees to services to create joint value with our partners."
Why does all of this matter? Apart from the fact that P&G is the biggest advertiser in the world and has a right to call it out, Pritchard also pointed out that better advertising, greater transparency, more reliable metrics and a de-cluttered and "clean" supply chain will drive growth for brands.
Therein lies the challenge for the stakeholders in the advertising industry. The days of having a highly fragmented, complex and opaque industry, sometimes tainted by capricious practices, are now over. While the writing has been on the wall for some time, the industry now needs to act swiftly to sort out the mess that it created while at same time doubling down on imparting the message that advertising and marketing, can and does deliver substantial returns on investment.
Contact John McGee at email@example.com
Sunday Indo Business