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What a waste! How agencies are squandering client budgets

Written by Andrew | 06-May-2016 09:41:40

Note: This article 
was originally published on the Wall Blog.

Agencies are up in arms after ISBA sent its 450 brand members its new framework agreement.

It is disheartening that the level of trust between clients and agencies has fallen so low but the breakdown in relations is no surprise.

New technology has made agency practices increasingly complex and has fuelled bad practice agency-side.

Debbie Morrison, director of best practice at ISBA has even stated “I don’t believe that [the media agencies] have got the best interests of their clients at heart any more”.

Clients often don’t know, or don’t have the ability to judge if what their agency is doing is truly in their best interest. More importantly, is it delivering against their investment?

Programmatic advertising is a powerful tool that can deliver exceptional results but its misuse by agencies is contributing to the breakdown of trust. For all the capabilities and capacity for learning algorithms have, like most tools programmatic works best when combined with timely human input.

As digital advertising continues to evolve, more and more brands are relying on agency insight to handle their programmatic advertising placement. However the big network agencies and their ad tech partners are guilty of not profiling target audiences in advance, and squandering budgets.

For those brands who aren’t big name market leaders, and who don’t have budget to burn, this can be a very expensive lesson.

To avoid wasting budget, agencies should undertake customer base segmenting and profiling, to target best prospects, and position the best message for each audience segment.

This process is crucial to success and for delivering the best return on investment.

Not taking the time to consider and set up appropriate targeting before a new campaign launch means that the initial volley of adverts is unfocused. What’s more, it stays this way until the algorithm has enough data to learn.

Not only is this a waste of budget, but it risks damaging a brand when irrelevant content is delivered to a disinterested audience.

Any marketer worth their salt knows that marketing messages are most likely to be positively received by audiences for whom the message is relevant.

A barrage of irrelevant messages irritates, aggravates and ultimately leads to avoidance and even ad blocking.

It’s not just agencies who are perpetuating the ‘no targeting’ approach. Brands are culpable too. At the Advertising Research Foundation’s annual ReThink conference Bruce McColl, the former Global CMO for Mars declared he did not believe in targeting given he is aiming for ‘mass market’.

This attitude represents so much that is bad about how programmatic is currently delivered. It does not take into account that consumers are more than just numbers. Tailoring your campaign to keep content relevant and using the right to data to inform targeting will drive great ROI.

It is fine if you have a blockbuster budget and a mass appeal product to push in volumes. But for other brands, the flaws in this practice are damaging what should be an effective and commercially rewarding marketing channel that drives growth.

Advertising must be practiced responsibly, if clients are to trust agencies with their budgets and customers are to continue to grant us access. The “no targeting” approach undermines the great work that can be done by media agencies to deliver value for clients.