Sir: Adam Leyland’s Leader (The Grocer, 18 May) noted that fmcg brands’ share of the £1.3bn digital advertising market has jumped from 9% to 16% since 2009. That may be so, but the reality is many are wasting 50%-80% of that spend.
Digital advertising technology is priced as a percentage of media spend (or a cost per thousand views - CPM, ‘cost per mille’). As a result, brand partners are being incentivised to spend the budget, not to optimise campaigns. There is no motivation for them to block ‘bots’, which often eat up over 25% of campaign impressions, or to improve frequency capping to stop consumers being overloaded with the same ad.
Also, a lack of transparency in digital ad buying means a large chunk of budget is lost to various commissions and fees taken by agencies and their buying partners.
However, the technology is there to slash digital waste and revolutionise campaign effectiveness. Brands need to adopt a new way of buying that focuses on ‘outcomes’ not ‘outputs’, with flat licensing fees rather than percentage-of-media pricing that encourages inefficiency.
Marketers need to pose straight-talking questions to partners about how much is being spent, where it’s going and why. For an fmcg brand with a big ad spend, this will have a huge impact on ROI.
Mark Connolly, MD EU & APAC, AudienceScience