Ode to transparency
Carat APAC’s CSO imagines a future where blockchain leads the industry to stop paying and incentivising agencies for the wrong things.
There’s been a lot of discussion, debate, time and effort dedicated to the topic of transparency in digital marketing. And rightly so. Transparency needs to be solved and fast.
Most of the editorial space and discussion panels dedicated to transparency focus on the wrong area, in my opinion. To a large degree we have gone down a rabbit hole. We narrow down on the measurement side. We focus on finding new ways to prove consumers have actually been exposed to, seen or clicked on advertising. Of course, that’s an understandable area of focus — it’s the most tangible and where the industry payoff happens — engaging with real consumers.
Perhaps I’m an idealist, naïve or not fully grasping the problem, but in my mind there seems to be a straighter-forward approach to solving this industry problem. And it doesn’t require the added complication of installing or implementing new or more adtech measurement on the back end of our delivery. Rather than focusing on finding better ways to measure, what if we shifted the focus to the very initial start point of the supply chain?
Introducing ‘blockchains’. It seems straightforward that this technology, which is fully available to us and which is helping drive transparency in other industries, could also be used to help transform how our industry supply chain works. The introduction of blockchains could create full disclosure and transparency to the entire model, front to end.
For those who may not be aware blockchains act as a transaction database shared by all nodes participating in a system. A full copy of a currency’s blockchain contains every transaction ever executed in the currency. It’s effectively a ledger of the entire transactional history of inventory. With this information, one can find out how much value belonged to each address at any point in time. It’s fully transparent, and there isn’t a way to break the chain.
Imagine implementing such a system that would put every piece of advertising inventory on the same platform with full disclosure of cost tracked over time.
Implementing such a system isn’t cost-prohibitive. The technology exists and its being used to transform other scandal-hit, scaled industries, namely banking. The real question and ‘block’ to such a system being used in advertising seem to be incentive. It’s important to remember that for industries like marketing and advertising, money is typically made through brokerage, arbitrage and commissions. The entire supply chain is complicit in the model, be it suppliers, agencies or of course clients who pay token homage to transparency but are not willing to pay agencies a living wage for the significantly increased complexity of the marketplace.
New entrants with less to lose in legacy models could be the accelerants of this approach, like the big consultancies. They seem perfectly placed to disintermediate the existing model in this way.
Agencies are also making haste to move the industry along to a more transparent supply chain. For example, as a group we are testing blockchain initiatives in several parts of our business, both internal and external.
Would implementing a full transparency model enabled by blockchains be the death knell of agencies as we know it? Perhaps. But I’d like to think a new and better model would emerge.
Rather than killing agencies, the model would actually help them flourish because it would put an end to the practice of remunerating and incentivising us for the wrong things. This has been exacerbated by the rise of procurement power and the fact that many clients are focused on lowering cost instead of increasing returns. Pitch after pitch still involves reducing net media pricing. What is the point?
Now imagine a model where cost would be fully transparent, trackable, even publicly disclosed. Imagine a model where the role of agencies is exclusively to focus on delivering great strategic work. Imagine a model where clients pay for agencies to think and where pitches are fully won on the quality of output, not balanced against procurement-driven pricing grids.
In the spirit of transparency, I’d like to fully disclose which model I would prefer to work within.
This article was originally published on Campaign Asia.
