The subject of transparency in digital advertising cannot be ignored. With issues like brand safety and ad fraud long having made headlines, the digital industry is demanding change. Transparency in digital advertising is important from two perspectives: cost and inventory. You need to know where (and in what context) your message is being served, and where in the ad chain your money is being spent. Without this data, you cannot make well-founded decisions.
Over the last decade, marketers have given digital agencies a lot of freedom when buying ad space. Agencies have made a lucrative business out of running an arbitrage-based model, buying digital inventory in bulk and then marking it up for advertisers. Writing for the Wall Street Journal, Alexandra Bruell points out that “clients didn’t cry foul, because they were happy with the performance of digital campaigns. Or because they weren’t clued into the complexities of digital ad buying and agency profitability.”
However things are changing. We now live in a world dominated by Google, Facebook, and programmatic ad exchanges which is anonymising the ad selling process. This is in stark contrast to the pre-digital era, which was intensely personal. Essentially, a large number of brands got used to pouring money into a black box marked digital advertising. But as clients become more informed and aware of better options and channels, they are now asking for more transparency within these processes.
Performance marketing is by far the most transparent model out there. While brand marketing has its benefits, when it comes to transparency and calculating return on investment, performance marketing’s strength lies in one simple concept: The agency network must meet client-defined metrics and achieve the desired impact (a measurable business result) to fulfill the client/agency contract. In other words, the agency must “perform” or they don’t get paid.
The process is simple. First, a client defines the desired action and its qualifying criteria. Then, the marketing agency/network designs a campaign that drives the greatest number of completed actions for the client. The most common actions include:
- Purchasing a product
- Installing an application
- Filling out a form (lead generation)
AdMarula works with numerous agencies to help achieve these performance metrics for their clients. The agency/network relationship can be a tremendously beneficial one since the agency’s strength often lies in delivering the creative work, while the network’s strength lies in generating performance-based results. For clients, the results move their bottom line in the right direction and allow for greater investment in and collaboration with the agency. A win-win for all.
Daniel Gross – CEO