Advertisers have learned that there is nothing that cannot be transparent in media
According to the Dentsu Aegis Network Digital Report 2019, in India, digital advertising is set to grow at 31.96% CAGR, with the market set to expand to INR 24,920 crore($3.52 billion).
The digital revolution has provided advertisers with many more opportunities to reach current and prospective customers. In an interview with Everything Experiential Sandeep Khewle, CEO, FirmDecisions shared his experience with digital media and more.
The relevance of financial audit has assumed significance across developed markets after the US Association of National Advertisers (ANA) released its full Media Transparency report – a ground breaking research report into media trading in 2016.What is the ground situation in India?
Until the ANA report came out, the US was considered to be one of the most transparent markets in the world. However, the report revealed that there are non-transparent practices in the US media market too. It was an eye-opener to advertisers in US and rest of the world. The key learning for global advertisers was that no market operates in a completely transparent fashion and there’s a need for them to stress-test their agency contracts - and regularly, too.
The situation in India is no different from the US and rest of the world. Advertisers in India, both global and local, took the learnings from ANA report to re-assess the rigor of their financial compliance audits.
What has been your experience of educating CFOs of large enterprises - who can play a central role and work closely with the marketing procurement – in helping CMOs to secure better value and return on their media investments?
It's a long process to educate CFOs and procurement leads on why they should be involved, directly and deeply, in media. We have observed that CFOs and procurement leads are increasingly part of the selection process of most advertisers’ agency of record, although I have to say that participation is much lower than expected in media buying. Marketing spend is one of the biggest single investments of brands that advertise, and yet the rigour is missing compared with CAPEX. Marketing spend is treated as OPEX, but CFOs need to understand the it is CAPEX in brand building and creating loyal and a long-term customer base. The challenge that FirmDecisions faces is that CFOs and procurement leads are currently too-little involved in media compliance. The general rule is that it is the responsibility of CMOs to manage all marketing-related services.
The global advertising market is increasingly digital. In mature markets, including India, advertisers typically invest more than half of their budget in digital media. This includes digital video (YouTube, Facebook, and digital video on demand, such as ITV Hub), mobile, digital display, search, and social media. In India, digital advertising is set to grow at 31.96% CAGR, with the market set to expand to INR 24,920 crore($3.52 billion), according to the Dentsu Aegis Network Digital Report 2019. The digital revolution has provided advertisers with many more opportunities to reach current and prospective customers. More platforms, more channels, more formats.What are the challenges of navigating financial transparency in digital advertising/marketing?
The marketing world is moving towards digital, as everyone can see the enhanced opportunities it offers to reach prospective customers. The growth of digital marketing is inevitable.
But the digital marketing ecosystem is non-transparent, in part because the agencies - and some of the social media platforms, including the biggest - are unwilling to provide complete and independent access to the data that matters. Digital marketing could be most transparent model by design, as the technology allows advertisers and agencies to gather relevant data. But agencies and platforms are using the novelty of the digital to make it unnecessarily complex and non-transparent. That, and the fact that many advertisers lack comprehensive knowledge of in this area.
It’s not just digital media that’s becoming increasingly complex and difficult for advertisers to understand – it’s the entire media and media inventory ecosystem. Has there been a growing realisation for advertisers to demand complete transparency on media and data from their agency partners in India?
Definitely. Advertisers have learned that there is nothing that cannot be transparent in media. It is clear from some of our recent contract compliance audits that advertisers are now more aware of the implications of inventory media buying, for example. They are willing to make informed decisions as to whether or not they should participate in inventory media, and that’s why they’re starting to demand complete transparency from their agency partners.
Has FirmDecisions undertaken an educational programme to sensitise CFOs which in turn would aid the latter make informed business decisions?
Over the past couple of years, we have run several workshops and participated in industry events and conferences to address CFOs directly. We will continue to reach out to theCFOs and procurement leads in the same way throughout 2019 as well.
First featured 05/09/2019.