Digital Trading: An Independent View
Yesterday I read two excellent articles that are worth bringing to your attention, especially if you have even a passing interest in the way that your digital media investments are traded.
Last week in New Orleans, senior agency execs met for the American Association of Advertising Agencies’ annual Transformation Conference. No surprise but one of the hot topics for debate was how media agencies make money from their digital media trading desks. For the full article see ‘Transparency Debate’. In summary the debate raged around the subject of trading transparency within agency trading desks and just how aware clients are of the margins being made on their media investments entrusted to their media agency partners.
As Rob Norman, Group M’s global digital chief, puts it their approach is “transparent but not disclosed”.
Whilst that debate raged on, there were those at Kellogg’s, Unilever and Kimberly-Clark (plus a growing army of others) who weren’t concerning themselves about transparency of margins but rather how to tweak the performance of their in-house trading desk and control the efficiency and effectiveness of their own media investment – shorthand for moving the business away from their media agencies and bringing in-house. With data playing an increasing role in the targeting of media, it’s easy to see why those with huge, complex data sets are wanting / needing to maintain full control.
Mark Kaline, Global Director-Media, Kimberly-Clark, is pretty clear that their ambitions for smarter plans include retaining their data and plowing back into CRM systems.
Again to enjoy the full article see ‘Building Private Trading Desks’
Clearly those two articles both fall under the umbrella of digital trading. But what opposing approaches. Whilst ones focuses on the transparency of agency margins, the other removes that problem in its entirety and hands full control to clients themselves.
Is one debate more right than the other??
If only the debate was so simple. It’s not. What’s right for one will be wrong for the other. But what it does point to is a real need for client organizations to explore their digital trading arrangements and make some real decisions about how media investments will be traded not just now but in the future.
As I see it the options and therefore decisions required are as follows:
- Digital Trading conducted by Media Agency
- Digital Trading conducted by Digital Specialist / Independent
- Digital Trading conducted In-House
This is an over simplistic view for a complex decision and the reality is that there’s a myriad of costs / disruption / Pros / Cons to consider within each option. But hey that mustn’t stop a decision being made.
Either way the value to be derived from media investments for business growth are far too important not to invest the time to make informed decisions.
It would be easy to look at scale and resource and let that be a determinate to whether or not the option to bring in-house is feasible or not. But let’s not forget just how many businesses are managing their own search / network buys. So perhaps not just for the big guys??
Our recommendations to brands is not to get hung up on the transparency debate but to have a clear and informed point of view about the best solution for their respective business. If the decision is to work with a media buying partner then look to build a remuneration model that both incentives and rewards.
This can and will neutralise the transparency debate by opening up a rewarding and collaborative relationship built on all sides striving for effectiveness and efficiencies.
If the decision is to go with an independent specialist or bring in-house, it goes without saying that there has to be a clear ambition of the benefit that this will bring to the organization.
For our FAQ on DSPs please do refer to one of our earlier blog posts.