April 28, 2024

5 ways to break through the Google, Facebook and WPP hegemony

You can look at the glass half empty, or you can look at it half full. 60% of the UK’s digital advertising marketplace has been sucked up by Facebook and Google along with WPP agencies and similar groups controlling the spend into them.

This leaves us with two options; we can either sell up and leave, or we can grow our businesses and compete in the arena. I for one refuse to look at the glass half empty. What we can’t afford to do is lose sight of the issues that are important to our clients.

“Social media is for those who don’t have a true digital strategy.” A knock to Facebook, given by global CMO of Coke, Marco de Quinto. He was making the point at an event last year, that mass targeting strategies across social platforms are not the sole answer to achieving digital marketing ROI for brands. A premise which external advisors have convinced many brand marketers to do. Yet Facebook and Google have been able to form a digital duopoly, dominating the market, and are forecast to take more than 70% of revenue spent on display advertising in the UK by 2020. New and growing ad tech businesses will most likely never be in a position to influence the hegemonic rule of Google and Facebook or sway their decision making. Effectively, we are a group of independent grocery wholesalers trying to compete against the ‘Big Four’ (Tesco, Sainsbury’s, Asda and Morrisons). The question we need to be asking ourselves is how can we help to shape and safeguard the long term direction of the sector and address the pre-existing issues to improve our position in 2017 and beyond?

  1. Continue to cater to the needs of the customer

The idea of putting the consumer first has been lost in some largescale agency groups where the abuse of trust and transparency is endemic. Over the past couple of years’ prominent agencies have been bleating that trust and transparency isn’t a problem within their organisation. However, this hasn’t been reflected in the actions of agency senior execs stating exactly the opposite. Can you blame brands for doubting their agencies? I have heard first-hand certain agencies saying they need to focus their client spend to reach their Google trading volumes. There are some agency organisations who categorise their clients using a colour system; clients categorised as red can be ‘burned and churned,’ whilst clients categorised as green signifies that the agency needs to be particularly careful as they are at risk of being audited. This is incredibly alarming, highlighting the state of the industry at present and how deep rooted the issues actually are. You know who you are and you should be ashamed of yourselves!

Just a few months ago Dentsu Aegis in Japan was found out for overbilling and falsifying invoices impacting 111 clients. A prominent exec, Scott Moorhead, who spent 15 years working at four UK agencies including Havas openly came out to say the media agency model is “broken” with agencies now generating “mountains of undisclosed income” through opaque practices “treading the fine line between unethical and illegal”. Last year, Jon Mandel, the former CEO of Mediacom, discussed the issue of transparency, damning agency media kickbacks whereby “they recommend or implement media that is off-strategy or off-target if it works for their financial gain”.

The most effective action we can take as an industry is clear. It’s incumbent on us to be honest and transparent first and foremost. This is at the heart of building client trust. We must lay our cards on the table and incorporate the client in every step of the process. Clear KPIs must be set and agreed upon from the beginning, laying the foundation for a solid strategy by both parties. Only by taking a customer centric approach and actually catering to the needs of the customer can we expect to develop and grow market share. By leveraging customer relationships and nurturing their journey, we can help scale their businesses and grow our own.

  1. Create the demand

Lets try a supermarket analogy, there is huge potential for the ad tech industry to emulate the success that some grocery brands (now global supermarkets) are seeing. Lidl and Aldi seized the opportunity to take advantage of the hubristic expansion of the ‘Big Four’ by providing consumers competitive pricing for premium produce. They identified a gap in the market and provided a value-add for consumers. In the same vein, within the ad tech sphere, you have Facebook who has admitted to a measurement problem several times now, overinflating figures of the value they have driven for their clients. It would appear the bigger the company, the further the management team are from the nuts and bolts of the business, which creates a disconnect and knowledge gap between the product and the customer. This is where smaller and leaner ad tech businesses can flourish, who have their ear closer to the ground and are able to pivot and adapt quickly to the needs of the customer.

  1. Find your niche

HelloFresh, an international meal delivery company with a subscription model and Approved Food, sellers of surplus and short-dated stock are two examples of businesses that have carved out their own niche in the market. Hello Fresh honed in on consumer awareness around health and convenience. Similarly, Approved Food tapped into environment conscious consumers. The same notion can be applied in our sector. I work for a company that has a fully customisable programmatic platform which enables marketers to be fully self-sufficient with total control over their programmatic campaigns, thus differentiating ourselves in the market. Any customer data that we create or use is provided by our customers, always belongs to our customers and is returned to them as and when they want. Customers can determine exactly what service they are getting from us.

  1. Collaborate more to improve our offering as an industry

A particular area we must focus on is reducing the disconnect between programmatic and creative to deliver a better experience for consumers. There can be a visible lack of understanding and experience by creatives on the role programmatic has to play. Creatives see programmatic as purely a technology, a means to deliver an ad. By incorporating programmatic they believe they hamper the emotional and artistic element. This is clearly a misunderstanding of the role creative needs to play in the next stage of programmatic expansion. Another problem that has arisen is the unwillingness of media agency partners or the brands themselves to share the necessary data with the creative partner. Until the two can work hand in hand we are not going to see the development in creating meaningful consumer experiences needed to grow business.

  1. Address online fraud

We’re seeing an ongoing hostile attack on the integrity of our industry through ad fraud - the latest largescale affront coming from Methbot. For the last ten years online fraud has been a huge problem that no one wants to address. The exchanges seem not to care as they get paid regardless and the same goes for ad agencies. As a result, there is a total lack of systematic trust which is now on par with that of the banking industry. Just as it was there, self-policing our industry doesn’t work. Despite being able to provide digital proof, there is still scepticism amongst clients. To eliminate this, clients should have their click paths audited by independent third parties, opening the lid on media owners’ black box and solving the ‘marking your own homework’ dilemma.

If you look at the beverage multinationals, the likes of Pernod Ricard, Diageo etc have been able to dominate their marketplace for years. However, in the last decade we have seen more and more people successfully develop their own brand of drinks; from investing in bespoke distilleries, crafting new lagers to producing new mixers, Fever Tree is a prime example. So what does this show us? It shows us that people got fed up with what the market was serving them. This rings true to the ad tech industry. One of the reasons the ad tech industry is in trouble is because it has spent too long isolated in its marketplace bubble. If ad tech hadn't lost its connection with the outside world then some of the aforementioned shoddy practices would have never gained ground. By putting in place the necessary measures to combat against fraudulent practices we will improve our services and products. The reality is we need to get our act together to cultivate a diverse and competitive ad tech industry in order to protect and scale our sector and rebuild our credibility.

Essentially, we can bitch about the fact that our industry is skewed by huge multinational companies who are effectively above the law in most jurisdictions they operate in, or we can effect change by working with our clients and our customers in ways that helps them build their businesses.

If we do not sort out fraud in our industry then governments will come and legislate. We have been warned and we are still ignoring the signs.

In the words of Charles Darwin, “it is not the most intellectual of the species that survives; it is not the strongest that survives; but the species that survives is the one that is able best to adapt and adjust to the changing environment in which it finds itself.”

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