by Fuel | Apr 25, 2024 | Fuel Thoughts
The trouble with media auditing pools is that when they get too deep, you run the risk of drowning.
Produced in collaboration with RAUS Global and AMI+ Partners
The best mantra in media circles is to Ensure you get what you paid for, and clearly defined terms describing what constitutes value is the key to verification. Value metrics may involve a number of benchmark definitions. Some may include a reference to a pool price, although, in recent times, the reference is most likely to add historical performance references.
Consider the potential for misunderstanding when media value swaps and Inventory Media are introduced into the equation. It becomes clear that simply surpassing a pool or any pool reference can, at best, only be a partial benchmark.
Fact #1: The largest media market, the USA, is so precise that a media audit reflects that market precision. Our work is focused on measuring delivery against the contractual agreements contained in the MSAs and the Upfront contracts. This does not require any pooling mechanism.
Fact #2: In most contemporary agency contracts, value guarantees are based on a clearly defined price point, generally historic client-specific inventory pricing. Again, though originating from a different pricing point (the client’s own inventory), this approach is exact.
Our teams are generally required to interpret the delivered and verified value and apply it to a contractual (Client/Agency) context.
Delivery #1: In the USA, Fuel Media & Marketing’s partner AMI does not require a pool. The value metrics that matter are contained within the vendor contractual agreements. Pooling simply does not measure exactly what you supposedly paid for.
Delivery #2 In most contexts, benchmarks based on actual advertiser inventory are preferred. For instance, metrics such as ‘cost per thousand impressions’ or ‘return on ad spend’ are gaining popularity. This has happened as advertisers have increasingly become frustrated that their campaigns seem to beat pool benchmarks more often than not. Agencies will always put the best case forward to modify pool output due to buying conditions, diluting the power of a pool.
Historic agreements might reference tracking adjustments governed by pools or agreed inflation/deflation modifiers. Both methodologies have a part to play; however, consider the scenario of a multi-media or multi-territory mix of audits. The Media Value Swap, whereby performance across channels or even markets is aggregated into one overall value delivery, losing rigor and the confidence of local marketers. It soon becomes the ‘Get out of Jail’ card, allowing a delivery price to beat the pool.
The crux is that this is NOT the value metric the client agreed to. They need to receive precisely what they paid for. That problem can multiply itself when multi-market international agreements are susceptible to cross-territory media value swaps; poor performance in Italy could, for example, be cancelled out by a stellar value delivery in France. This is different from the value metric the client agreed to in Italy, even though Paris may be delighted.
We are getting deep into the weeds of media audit structure. The desire must be to encourage an equitable relationship where both the advertiser and agency benefit.
Trust is at the bedrock of that relationship, one where each party has faith in the value metrics agreed upon. These can not be open to interpretation based on an agency’s need to find extra value.
In 2024, a business relationship that involves allocating one of the most significant corporate expenditure items, media space, value is critical. The precision outlined above should now persuade the market to approach value metrics differently.
Metrics that take into account price pressures, inflation, booking deadlines, and inventory media minimise potential distractions that can call into question the actual contextual place of media value swaps and media inventory purchases, with the natural disruption in the stability of pools.
So back to where we started: “Make sure you get what you paid for.”
The best way is to agree on fixed reference points and how these should be normalised when the benchmarking process takes place.
Fuel Media & Marketing suggests advertisers and their agencies consider why pools may not always be the right approach
- Trust is potentially undermined
- The media audit itself can lose its power as interpretation becomes a joust.
- Advertiser/Agency Relationships are strained and potentially jeopardised.
Fuel Media and Marketing is a leading specialist communications consulting company. Our teams advise clients in the field of media communications. To find out more on how Fuel can help, contact Oli on +44(0) 7534 129 097 or email oli@fuelmediamarketing.com.
by Fuel | Mar 26, 2024 | Fuel Thoughts
There has been much written recently about Inventory Media, and how it has assumed a significant position in client media choices.
Nick Manning, of Encyclomedia, recently laid out the facts and reached well drawn conclusions that participating clients should know. Nick’s key conclusion is that client trust in their agencies’ business practices are at risk.
Fuel Media & Marketing suggest that clients may wish to dig even deeper.
To do that we should summarise the background into the relevant steps. These can be described in the following way:
Step 1. Many years ago the best agencies decided to aggregate their clients’ negotiating volumes in order to generate advantage in the TV and print markets initially. Typical leverage outcomes would have included a competitive share of premium break slotting and/or programme type slots.
In time inventory transactions introduced Step 2. Discounted pricing. Agencies were juggling and allocating advantage to clients based on importance (often subjectively decided).
Step 3. In today’s market we have a straightforward situation whereby agencies are broking that inventory derived media, the agency is trading in media they have not yet sold, or planned to sell. A mix of volume-based extras/premium advantage and cleared media bought at discount. The pool of inventory media is then presented to clients as a discounted package of media.
As we step back and make a judgement, we use a simple analogy. Would you buy a discounted family house in the wrong city? In other words discount and cheap can only have value if applied to the media you need in the first place.
Let’s pause there, and assume that we are an advertiser poised to assess an offer to buy inventory media for all the right reasons. Clearly at the end of your assessment, and once you have established all strategic issues are satisfied, what is the point of agreeing if you can’t be sure of the discounted value? Perhaps as important to any or all of the agency’s clients is fairness of treatment. As we have discussed above a part of the Inventory media construction is a component that has been generated by client aggregated volume. Leverage of volume is not unique to media.
It is obvious that a client that contributes volume to the overall agency volume and that does not ultimately participate in the Inventory Media distribution, is losing out. In simple terms: Client A is subsidising Client B.
Not only trust is at stake. The follow on, that of overall fairness of the distribution of the negotiating power, might be skewed dramatically in favour of specific clients. Those with auditors, those with bonus schemes, significant blue-chip advertisers, those coming up for contract renewal or pitch.
So how can agencies overcome this perception of inequality in value distribution that, in straight talk, is the result of broking media with other people’s money?
Advertisers should incorporate the following factors into their media planning scenarios
#1 Ensure that the implied media placements’ audience deliveries are consistent with your overall strategies.
#2 Don’t expect full transparency, and for a good reason. Of course, whatever the wholesale price of the inventory media units, and despite calls for greater insight into the agency’s margins, clients will undoubtedly have agreed to their own personalised media value position guaranteed by the agency. That must lead the clients’ perceptions of how they might approach the inventory media offerings. We suggest this key fact should override any calls for that greater insight into operating margins. Even the seemingly reasoned request for more equitable distribution of the inventory component that includes volume bonuses/value pots [the free part of the inventory] generated via the overall agency volume to which all clients contribute, should be parked.
Clearly deeper insight to the wholesale price and indeed the volume derived aspect would be revealing, but the client trust factor is best focused, initially on delivery of each client’s own personalised value agreement.
#3 The agency needs to cooperate to demonstrate the market competitiveness of the Inventory price. In order to do this you are likely to require an independent third party expert.
#4 Be absolutely clear that non-conforming media placements have no value even as make-goods.
AND for clients that have declined participation in the Inventory Media offer – Fuel Media & Marketing suggests a single question:
“Where is my extra value considering the agency has aggregated its overall volume for advantage and sold it all on to participating clients to my exclusion?”
The bottom line must be for advertisers to insist on a share of the benefits of all the aggregated clout an agency has to manipulate. After all, advertisers bought into the agency volume arguments during the pitch.
Fuel Media and Marketing is a leading specialist communications consulting company. Our teams advise clients in the field of media communications. To find out more on how Fuel can help, contact Oli on +44(0) 7534 129 097 or email oli@fuelmediamarketing.com.
by Fuel | Jan 11, 2024 | Fuel Thoughts
What is Premium Media? Most observers in the media world would settle on the general descriptor Premium Media implies Higher-Quality Inventory than is generally bought.
The definition of high-quality is critical for advertisers. After all, Premium leads to cost implications. Fuel Media and Marketing witness many consequences of Premium expectations and what this all means. Our services for advertisers need to manage/interpret both sides of the different perspectives.
The focus should be on advertiser agreements, both prospective within say, the detail of a pitch process; as well as in-campaign schedule delivery, which requires stewarding to ensure contract agreements are indeed delivered.
Context is everything in both cases. Fuel Media and Marketing’s role is to advise professionally, it is no flippant claim to state that premium almost always implies high price – high stakes.
So how should advertisers respond to their agency when the phrase “Premium Media” is floated?
Why and How?
This is the first issue to address – why and how – Premium? Is there a need for Premium Media in any media schedule? To help you judge let’s look at two potential benefits:
- Reach of rarefied audiences that are ordinarily very difficult to target without exceptional media treatment
- An attempt to lift the general schedule content above the mass communication background into a premium standout
Two directions that can be critical for a advertiser’s requirements.
If the advertiser/agency understanding of Premium and the implied vendor follow on negotiation is clear, the advertisers are unlikely to be disappointed.
Definitions and intentions are key in all of this. For example, an agreement to provide a certain quantity of Premium Media should be interrogated against the two above descriptions. i.e. does Premium mean:
- The reach of specific audiences?
OR
- Standout above the general advertising noise?
To demonstrate how Premium fits in to the plan we illustrate how it may work:
If the advertiser’s perspective and requirement of Premium differs from the agency’s offer there may be disappointment ahead.
Let’s say for example that the agency commits in its pitch/appointment agreement to deliver 10% of all media as Premium and with that offer the added value (+10%) may be delivered through alternative routes, possibly as follows: each might contribute the 10% value increment :
- Part delivery by complementary positioning of OOH in prime locations.
- Premium break positions in a minor TV station’s main schedule.
- Super standout placement in a low priority channel (i.e. closed break)
- Website homepage takeover
Optimising these good intentions requires that the advertiser/agency agreement is rigorously managed and delivered consistently with the brief.
Key to all this should be the avoidance of placements that are sourced from agency-controlled inventory that do not fit in with the overall objectives and strategy. This is not to say that inventory media is inherently bad, rather that shiny media placements delivered to make up the contractual agreement and deliver the agency a bonus should always align with strategic imperatives. The underlying message is competitive strategically consistent value.
Fuel Media and Marketing recommended essential watchouts include:
#1 As with any purchase we need to make sure an inclusion of Premium fits in with your intended strategy
#2 Avoid carryovers from campaign to campaign, or substitutes, into media channels that are clearly off brief.
#3 Value delivered digitally that involves communication other than the space in the brief (i.e. editorial or alternative space format or alternative website) may be beneficial. However, these strategic variations must be agreed upon before implementation.
#4 If your contract itemises a specific appearance, i.e. the unique break format leading into the sporting event commencement/resumption or a homepage takeover and these are replaced with an alternative, then the deal is breached.
#5 The avoidance of confusion over audience targeting intentions and standout specials, or indeed poorly-defined descriptions of Premium is crucial.
In conclusion, make sure you and your agency are aligned on definitions and expectations, so that your company does not find it has agreed to buy a shiny piece of inventory that has little tangible value to your objectives. The Litmus Test is simply this:
Unless a media choice gains special access to your designated target audience or brings heightened attention factors, or both, then the idea of premium for premium’s sake may not be for you.
Fuel Media and Marketing is a leading specialist communications consulting company. Our teams advise clients in the field of media communications. To find out more on how Fuel can help, contact Oli on +44(0) 7534 129 097 or email oli@fuelmediamarketing.com.
by Fuel | Dec 14, 2023 | Fuel Thoughts
Very little has changed and the potential could still be huge for advertisers.
Over the last ten years the marketing community, while embracing the effectiveness of programmatic communications, has become accustomed to aspects of the process that effectively added margins for agencies and vendors at a far greater level than historic precedents.
Through a mixture of added ‘Technical/Targeting charges’ and platform add-ons the total investment has become inefficient, or in the parlance of our time, Working Dollars are diluted.
Several studies have now been produced by organisations such as WFA, ISBA and the ANA. The ANA has concluded that the proportion of total investment eventually landing as Working Dollars lay at 36% or less. This means an average of 65% sacrificed for the Technical facilities; the platform management as well as agency commissions/fees.
Staying with that ball-park figure of 65% margin cost, how does the latest “ANA Programmatic Media Supply Chain Transparency Study (December 2023) expand our knowledge?
Broadly speaking the report confirms that very little has changed, and it certainly doesn’t contain any ‘gotcha’ moments. This latest ANA report does however offer greater analytical detail and takes the time to explain exactly how and where the margins are created and accounted for.
For example the latest estimate on efficiency that states just 36 cents reaches the audience in terms of purchased impressions is now provided and accompanied with more detail breakdown into:
Transaction costs (primarily DSP and SSP fees, but excluding agency and DMP fees), which account for 29% of the ad dollar.
Loss of media productivity costs (non-viewable and IVT impressions as well as non-measurable for viewability and Made for Advertising ad spend), which account for 35% of the ad dollar.
As the report moves through the analysis it becomes clear that this approach provides greater detail beyond the scope of the earlier ISBA and WFA reports.
However the overall conclusion for advertisers must be to take the ANA’s advice, as stated: “For all marketers, this (Report) presents a perfect opportunity to do a media management self-assessment”
The report has twelve sections.
- The Average Campaign Ran on 44,000 Websites
- Made for Advertising Websites
- Focus on Inclusion Lists, Not Exclusion Lists
- Direct Supply Chain Contracts
- SSP Optimisation
- Information Asymmetry
- Advertisers Prioritise Cost Over Value
- Optimising OMP and PMP
- Price, Ad Quality, and Value
- Data Access and Log-Level Data
- Measurability, Viewability, and Invalid Traffic
- Sustainability
Each of the sections provides a “Recommended Playbook” for marketers. These are recommended action steps to help optimise investment in programmatic media leading to a greater percentage of every ad dollar reaching the consumer.
Ultimately, our opinion is that the report doesn’t quite hit the mark, despite the wealth of data analysed and the good intentions. Our team’s individual client reports from 5 years ago came to the same conclusions about percentages of programmatic advertising dollars reaching the publishers. Additionally the methodology used is limited, agency fees are not included in the transaction costs, the results are extrapolated from just a few vendors and there is no mention of white-label mark-ups for the clients of the DSPs, the agencies.
Fuel Media and Marketing came to the following conclusion about the ISBA/PwC report three years ago. It still seems pertinent.
“Fundamentally agencies don’t care if it’s opaque and complex, if it’s efficient they’ll use it and let the rest be the publishers concern (if the supply chain happens to rebate the agency then obviously the agency might prefer to use those individuals over others). As far as complexities go, either the buyer or publisher has consciously made the decision to use that supplier, theoretically to the benefit of the client depending on their targeting 3rd party data needs.
The costs won’t necessarily lower if it becomes transparent, the client will just know what they’re paying.”
For an in depth analysis of your programmatic value chain please get in touch to see what our tools can do and where the opportunities for your brand lay.
For more information please get in touch with Oli at Fuel Media and Marketing, at (+44) 07534 129097 or oli@fuelmediamarketing.com.
Fuel Media and Marketing is a leading specialist communications consulting company. Our teams advise clients in the field of media communications. To find out more on how Fuel can help, contact Oli on +44(0) 7534 129 097 or email oli@fuelmediamarketing.com.
by Fuel | Nov 22, 2023 | Fuel Thoughts
At Fuel Media and Marketing, we often ask guest experts to comment on the prevailing subjects in the trade media, and today is no exception. With headlines like these all over the press right now Artificial Intelligence in business has never been more pertinent. We asked Katie King, published author and CEO of AI In Business to give us her hot take on the burgeoning industry, what it means for marketing and how to begin using this fascinating technology.
Katie is a published Author, Keynote Speaker and Consultant on Artificial Intelligence. Voted the ‘Leading AI Strategist’ and ‘Top 10 influencer in AI’ in 2023, Katie has over 30 years of consulting experience and has advised many of the world’s leading brands and business leaders, including Virgin, Harrods, Rolls-Royce, o2 and more.
By Katie King
Artificial Intelligence. Everybody seems to want to adopt it, but few know where to begin. With so much talk about AI, it can be challenging to cut through the hype and separate fact from fiction. Here are my top 3 must-haves for marketing leaders looking to adopt AI into their teams.
1. Need
In today’s highly competitive and tumultuous marketplace, businesses and their marketing teams simply cannot afford to embark on vanity AI projects. That’s why it is critically important to have considered a few business cases for AI as opposed to jumping on the tactical bandwagon. What problems are you looking to solve? What areas need improving? Once you are clear on what you are looking to achieve, only then can you truly assess if adopting AI is a logical next step. You may find that AI is the right solution, or you may find that there are other routes available for solving your problems.
It is also important to ensure that the needs you identified guide which tools you adopt. This technology is not a one-size-fits-all solution to every business problem, and trendy platforms may not be the answer to your organisation’s issues. Be clear on your needs and the issues at hand, and keep those factors front of mind throughout the rest of the adoption journey.
2. Realism
Choosing the right tools is only half the battle. There has been a lot of hype surrounding AI, which has unfortunately led to misinformation and inflated expectations. AI will not solve all of your problems overnight nor will it replace your entire marketing staff, which is one of the most common misconceptions circulating currently. This technology is very good at the tasks it is created for but cannot ‘do it all’.
Therefore, it’s important to be realistic about what AI can accomplish for your business and what it means for your team. Think of this technology as an assistant rather than a boss, and a Co-Pilot. Equipped with AI tools, for example, your own tailored GPTs, Midjourney, Phrasee and other tools, your team will become more productive and effective, but for AI to work it will still need clever prompting and oversight from your human staff.
Be sure you are just as clear on the limitations of this technology as you are on the potential benefits, and do not rush into any hasty staffing decisions until you understand the role AI will play in helping you reach your goals.
3. Communication
As a marketer, you’ve built your career on communicating well, but getting your messaging right during your AI adoption journey is one of the biggest challenges you may face. There are multiple stakeholders involved in a successful AI adoption including the leadership team, staff throughout the organisational hierarchy, customers, investors, shareholders, and beyond. How you generate buy-in and support from these different groups will vary, and will require you to adapt your tone, messaging, and approach.
You will need alignment from the leadership team on core objectives and may potentially have to make a case for investing in certain tools for various tasks. With your team, you will need to offer reassurance and create excitement for the next stage of the business. And with your customers, you need to communicate how AI is being used to improve their experiences and offer transparency into the role their data potentially plays in that. It can be a fine line to walk, but navigating the communications divide is the perfect challenge for a skilled marketing leader.
When adopting AI, the hardest and most critical steps you take are often the first few. Having the right expectations, clear objectives, and alignment can make all the difference.
If you are looking to assess your team’s preparedness for AI, try out my virtual Scorecard for Success found here: https://www.aiinbusiness.co.uk/scorecard-for-success
For more information or an introduction to Katie, please get in touch with Oli at Fuel Media and Marketing, at (+44) 07534 129097 or oli@fuelmediamarketing.com.
Fuel Media and Marketing is a leading specialist communications consulting company. Our teams advise clients in the field of media communications. To find out more on how Fuel can help, contact Oli on +44(0) 7534 129 097 or email oli@fuelmediamarketing.com.
by Fuel | Nov 21, 2023 | Fuel Thoughts
The world of economic forecasting has been expecting a global economic shock for some time. After all, the global economy has enjoyed a long period of 15 years since the last major economic jolt (COVID-19 aside). Fuel Media and Marketing has been prompted by the uneasy mood summarised above as we take time to reflect on some of the key aspects of the communications industry were such an economic hiatus to happen in 2024.
At Fuel Media and Marketing, our focus always involves transactional efficiency and rigorous contractual effectiveness. As 2023 draws to a close what can we recommend clients pay particular attention to? The number 1 Priority is to ensure your PRF agreement deals with deflation, in parallel with inflation. We are strong believers and advocates for the productive effects that well-structured performance-based agreements, PRFs, bring to Client/Agency relationships. We urge our clients to pay very critical attention to contractual details which manage the potential unintended consequences.
The world of business must expect economic regression as an intrinsic fact of economic cycles. Last year we highlighted a piece of analysis that GroupM had produced which tracked the co-relationship between Global Ad Revenue and GDP. Here it is again, a clear relationship.
According to The Economist in its 4th November edition, we must anticipate a GDP blip soon and potentially in 2024.
Without stating the obvious, and assuming such an occurrence, Ad Revenue decline will invariably accompany GDP downturns, and these have historically precipitated media cost reductions.
Our first advertiser recommendation is to review your PRF terms – if you have such an agreement.
#1 Inflation/deflation (these need to be calculated via different methodologies)
#2 Use of value pots
#3 Value equivalence (for example, swapping value delivery between media channels or formats)
#4 Geographical swaps (swapping value from one territory to another)
Don’t be afraid of Performance-based agreements!
The key element in all PRF agreements from the advertiser’s perspective is to ensure competitive value. Inflation is a key element among the factors, though clients must bear in mind that media prices will likely deflate.
We urge clients to balance the likely deflationary effects on media pricing.
With your agency, ensure your joint efforts to ensure competitive value have a focus on the following elements that can count for so much. Make sure your checklist includes:
- Media value definitions:
- A deal clause that makes up value in unspecified media may have absolutely no worth to your brand
- Similarly, consider timing; formats; geography as well as any divergence from strategy that does not work towards your goals and strategy
- Make sure the contract is relevant to your objectives
- Flexibility in your agreement:
- The fundamental point of a PRF agreement is to underpin competitive efficiency – in inflationary and deflationary conditions. Don’t unduly restrict your agency’s ability to take advantage of deflation on your behalf
- Ensure that your contract or MSA is based on the latest globally accepted principles, but that key clauses are tailored to your requirements
Finally, underpinning the whole process must be teamwork. Agencies are in business to please their clients by delivering results. At the heart of their PRFs is flexibility to drive value, relevant value.
Fuel Media and Marketing is a leading specialist communications consulting company. Our teams advise clients in the field of media communications. To find out more on how Fuel can help, contact Oli on +44(0) 7534 129 097 or email oli@fuelmediamarketing.com.
