Marketing Math Blog

3 Reasons to Exercise Caution When It Comes to Influencer Marketing

By Advertisers, Media, Media Transparency, Social Media No Comments

CautionGiven what we know, it is natural to wonder what could possibly be fueling the meteoric growth in influencer marketing. The hypothesis driving marketing spend in this area is that consumers are more likely to buy from someone they trust and that influencers can instill a level of trust between consumers and brands.

Influencer marketing campaigns seek to achieve this desired end by incorporating social content and or sponsored blog posts by individuals who have purportedly cultivated a large base of engaged followers. The hope among marketers is that positive feedback on a brand from these influencers can enhance their brand’s appeal and drive sales to a greater extent than they could through direct-to-consumer advertising.

As a result of this belief, influencer marketing will reach $15 billion by 2021, up from $2 billion in 2017, and will enjoy a 40% annual rate of growth for the next five years (source: Business Insider Intelligence). Clearly, the industry has taken the words of Alvin Toffler, American writer and futurist to heart:

“It is better to err on the side of daring than the side of caution.”

However, as the industry has seen with the rapid rise of programmatic media, just because a market sector is growing, does not mean that it is effective, efficient or without risks and therefore worthy of an increased share of an advertiser’s media spend. We believe that there are three reasons why marketers may want to exercise a little dose of caution when it comes to their influencer marketing investment.

Reason Number One: It is important to recognize that most consumers make the distinction between peer-to-peer advice and influencer marketing. This has become even more pronounced given that the FTC has introduced guidelines to prevent influencers from accidentally or intentionally misleading their followers, requiring them to disclose their relationships with the brands and companies that they are writing about. These guidelines include using disclosures such as “#ad” or “paid for by” at the beginning of a post or a video and prohibits misleading endorsements or the use of unsubstantiated claims by influencers that a product marketer couldn’t legally make. Additional regulatory action in this area, however difficult to police, will make the blurring between influencer recommendations and paid advertising even more apparent to consumers. The question is; “What impact will the need to more overtly identify influencer posts as paid endorsements have on the appeal this type of marketing?”

Reason Number Two: U.S. internet users continually seek to avoid the myriad of frustrating digital advertising practices employed by marketers. This can be evidences by the rate at which people are opting out of cookies and deploying ad-blocking software to insulate themselves from commercial and or inauthentic messaging. How prevalent is this you ask? According to eMarketer, one-in-four U.S. internet users currently utilize ad-blocking software. Yet as influencer marketing grows and the regulatory environment has tightened, the potential for unethical behavior has also risen, presenting challenges to both marketers and social media platforms. These challenges include fake follower and or user bases, the publishing of inauthentic posts and fraudulently representing vanity metrics, such as social followers. To mitigate this risk, some social platforms have begun to move away from vanity metrics, focusing more on the quality of an influencer’s content, which, ironically is counter to what many brands seek (e.g. influencers with at least 10,000 followers across a number of social platforms). Earlier this spring, independent investigations into Amazon’s “review economy” found that of the 200 plus million reviews analyzed, over 11% were untrustworthy. If such activity were to occur and to become known to consumers, who are already frustrated by such practices, the potential damage to a brand could be significant.

Reason Number Three: Influencer marketing is fraught with transparency and fraud challenges. At a minimum, this makes it very difficult for marketers to assess the efficacy of the fees paid and results attained by their social media campaigns. One of the challenges is that marketers will often employ specialist influencer agencies to manage their influencer marketing initiatives. Like with programmatic digital media, the presence of non-transparent mark-ups and masked commissions makes it difficult to truly assess the fees being generated by such agencies and the amount of a marketer’s influencer marketing investment that is actually passed on to the influencers themselves. On the fraud front, marketers clearly bear the brunt of the risk. Sadly, too many of the stakeholders in the influencer marketing supply chain (i.e. agencies, influencers and platforms) all benefit from inflated user metrics. Thus, the motivation for reform may be less intense than marketers may desire. Let’s face it, fake followers (bots) have plagued influencer marketing from the onset, sparing few if any social platforms:

  • Facebook proactively closed-out 1.3 billion “fake accounts” in 2018.
  • A study by the University of Southern California and Indiana University found that up to 50 million Twitter accounts could be bots rather than genuine users.
  • YouTube has often been in the news for “fake” views. Significant in that views are the basis by which the platform and people who make a living posting to this platform earn money.
  • MediaKix recently estimated that 1 out of 10 Instagram users may be bots.

Sadly, when companies, individuals and or platforms choose to employ the use of bots to falsely drive their social media metrics it isn’t often readily detectable and to date, has not been preventable. According to CBS Interactive, 15% of influencer marketing spend is lost to fraud, costing marketers $1.3 billion annually.

For brands that desire to get their content to potential customers through the use of influencers, proceed with caution. The value proposition of this marketing channel is compelling, but the difficulty in quantifying a true return-on-investment in this area is equally as challenging.

How Advertisers Can Minimize “Out-of-Scope” Surprises

By Advertisers, Advertising Agencies, Agency Fee & Time Management, Billing Reconciliation, Scope of Services No Comments

project scope

In many companies, once the annual marketing budget has been submitted and approved, it is often set in stone, with little opportunity for incremental funding over the course of the fiscal year. Moreover, many organizations employ a line-item accountability approach to budget management, which limits flexibility for shifting dollars from one initiative or one market to another.

Thus, it is important to approach the annual Client/Agency planning process in a deliberate and careful manner. As Ben Franklin once intoned: “By failing to prepare, you are preparing to fail.”

Outside of the budget, one of the key outputs of the planning process is a Statement of Work (SOW) document that accurately and completely identifies all agency deliverables and detail on the timing or due dates of key deliverables. It is the SOW that then provides the basis for the agency to develop its proposed staffing plan and attendant fee recommendation. In an ideal world, the annual SOW is comprehensive in nature, covering both key deliverables and the prospect of potential contingency projects.

Some advertisers rely more heavily on a project-based remuneration program with their agency partners (versus retainer based fees), which lessens the risk for in-scope or out-of-scope confusion/ issues. However, since most advertisers employ an annual retainer fee based approach that is intended to cover most, if not all of its agency partner’s marketing and advertising deliverable costs, “out-of-scope” work requiring incremental remuneration potentially results in negative repercussions.

Properly executed, the annual SOW development and management process can minimize the potential for “surprises” that can be problematic for both advertiser and agency. The best approach is a combination of art and science, relying on a firm understanding of accurate historical project performance and an advertiser’s internal processes ranging from briefing the agency to securing the requisite approvals. Below are three key actions that both parties can take to minimize out-of-scope surprises:

  • Begin the annual Client/Agency planning process with a studied, fact-based review of the prior year’s SOW. This should include a review of key projects, deliverables and the amount of time and resources that were actually expended relative to estimate levels. Understand and discuss the drivers of project costs ranging from rework levels to approval delays to inaccurate estimating, and identify how those issues can be addressed going forward.
  • Review the agency’s proposed staffing plan to make sure that the time allocations and utilization rates are consistent with the nature of the deliverables (i.e. strategic vs. tactical, complex vs. adaptation, etc.). This can help to right-size the fee by aligning bill rates for the appropriate personnel with the initiatives and tasks that are best suited for their skill sets and experience.
  • Ask the agency to provide monthly time-of-staff tracking and project status reports showing burn rates and percent complete detail. This will provide both parties opportunities to make real-time course corrections on specific projects and make the requisite adjustments to keep the SOW on budget. Optimally, these reports and the resulting implications should be discussed face-to-face each month.

Ultimately, the final SOW should be submitted in a form that contains the agency staffing plan with time, utilization and bill rates by position, fee work-up sheets (direct labor costs, overhead rates, profit margins) and comprehensive rate sheets for in-house agency services (e.g. studio) and non-retainer personnel.

Regardless of whether or not the fee is direct labor or outcome-based, fixed or reconcilable, it is still important to require agency reporting and analysis of time on task and agency staff mix utilization. The insights afforded both parties from investing in this practice will inform future SOW and project scoping and minimize surprises related to excessive expenditures for incremental time and out-of-pocket expenses.



Time for a Financial Review?

By Advertising Agency Audits, Contract Compliance Auditing, Marketing Accountability No Comments

Knowledge Transfer


No triple bid.

No staffing plan.

No reconciliation.

Fixed fee

100% advanced billings.

Slow job cost reconciliation.

Poor Agreement language.

Old Agreement.

No examples / templates.

No breakout of retainer vs. out-of-scope fees.

No agency reporting of costs / hours.

Programmatic supply chain not understood.

Use of in-house agency services, no rate sheet.

Use of in-house agency services, not reconciled.

Freelance billed at full retainer rate.

Interns billed at full retainer rate.

Credits held.

Low Full Time Equivalent basis.

High Rate per hour.  No fee detail.  Non arms-length use of affiliate.

Mark-up applied.

Float.  Kick-back.  Favored expensive suppliers.

Duplicate charges.

Time reported doesn’t match time system.


Luxurious Travel.


That’s the short list.

Don’t let this happen to your critical marketing dollars.

Update and lock down financial terms in Agreement.

Tighten up definitions.

Enhance Agency reporting required.

Perform routine spot checks.

Follow the money to the ultimate end user.

Vet Agreement with ANA template.

Ask the Experts.

Maintain consistence of control and visibility across the Marketing supplier network.

Maintain trust but validate Agency financial activity.

Strengthen the Agency relationship through understanding and alignment.


Advertisers Take Decisive Action to Safeguard Their Media Spend

By Advertisers, Featured, Media, Media Transparency No Comments

SafeguardAdvertisers, particularly larger, multi-national advertisers are assuming a greater level of responsibility for their organization’s media investments. The goal is to safeguard those investments and to spend their media dollars wisely.

The actions being taken by advertisers are clearly the result of the media industry not moving quickly or forcefully enough to resolve key issues confronting advertisers. Issues such as fraud, brand safety, viewability, tracking and performance vouching pose serious risks that undermine media effectiveness.

On the fraud front alone, cybersecurity firm Cheq issued a report earlier this year indicating that global ad fraud will cost advertisers “an unprecedented $23 billion” in 2019. Experts have stated that the continued growth in digital media expenditures, which will top $300 billion worldwide, combined with the lack of governmental and industry oversight makes this category highly appealing to fraudsters and organized crime.

Given the complexity of the global media supply chain and the technical nature of the sector advertisers are seeking to increase the level of rigor surrounding media performance and accountability.

Advertisers seeking greater transparency and security over their media funds and data have grown weary of waiting for the requisite level of support from their media supply chain partners. This has led some advertisers to transition certain aspects of their media planning and buying activities in-house. Others have formed or increased staffing and resource support for corporate media functions to enhance controls and stewardship over the investment of their media funds.

More broadly, in the wake of the Association of National Advertisers (ANA) 2016 study on media transparency, the organization in conjunction with its partner in the study, Ebiquity, issued a recommendation for advertisers to “appoint a chief media officer (in title or function) who should take responsibility for the internal media management and governance processes that deliver performance, media accountability and transparency throughout the client/ agency relationship.”

Recently, the World Federation of Advertisers (WFA), through its Media Board, recently announced that its members had formed the Global Alliance for Responsible Media. The Alliance will also be championed by the ANA’s CMO Growth Council, a member organization of the WFA. The council, which includes a coalition of advertisers, agencies, publishers, platforms and industry associations, will focus on delivering a “concrete set of actions, processes and protocols for protecting brands.”

We are hopeful that the initiatives being taken by progressive marketers such as P&G, Mars, Unilever and Diageo will spur the industry to action when it comes to comes to controls that safeguard media spend and improve the efficacy of those investments for all media advertisers.

While a rising tide may lift all boats, as the adage goes, we know from experience that when it comes to media accountability organizations cannot rely solely on the efforts of other advertisers, agencies or associations to protect their self-interests. This requires an ongoing commitment to improving media accountability, performance monitoring and stewardship efforts by them, their agents and intermediaries. In the words of Thomas Francis Meagher: “Great interests demand great safeguards.”



Assessing the Potential for Transitioning Work In-House

By Advertisers, in-house ad agency, Marketing Agency Network, Production Services No Comments

IdeasAn increasing number of marketers are transitioning portions of their advertising activities from their external agency partners to in-house teams. A survey conducted by the Association of National Advertisers (ANA) in the summer of 2018 revealed the following:

  • 78% of survey respondents indicated that they had an in-house operation of some sort
  • This is up 58% from 2013 and 42% from 2008
  • 90% of marketers with in-house operations have increased their in-house team workloads
  • 70% of marketers have shifted work from external agencies to in-house teams in the last 3 years

Although the ANA survey indicates that some in-house agencies are increasingly handling brand strategy and creative ideation work, most marketers that we serve continue to rely on external creative agencies for this type of work and are initially focusing their in-house efforts on a range of specialty services. This approach can minimize risk and cost, while putting the essential building blocks in place for eventually launching deeper into in-house agency commitments, if desired.

Endeavoring to build out a full-service in-house creative agency is certainly achievable and there are a number of successes that one can point to. Consider Innocean Worldwide which originally began as the in-house agency for Hyundai-Kia and has gone on to acquire clients outside of the Hyundai Motor Company. Innocean’s work has won global recognition for its creative work that includes a Silver at Cannes and an ADFEST Grand Prix in 2019. As well, Innocean has committed to growing its brand and weight in the industry by acquiring noted independent creative agency David & Goliath in late 2017.

However, building out a full-service in-house agency takes time and requires an investment in evolving the culture of the operation, attracting top-notch talent, developing the appropriate processes, and positioning itself to be successful in winning internal client confidence and ultimately the creative development work.

The effort associated with attracting and retaining top-quality creative personnel to ply their wares at an in-house agency can be significant. Providing end-to-end creative services requires an increase in headcount and drives up operational fixed costs. Further, the timeline required to demonstrate in-house agency abilities and to consistently produce fresh ideas and deliver quality work is uncertain. This is particularly so if there isn’t a corporate mandate for brand marketers to utilize the in-house services. Thus, management must build-in enough time and budget to allow for relationships to take hold between the in-house team and the brand management teams, and for the in-house team to “learn” how to successfully compete for and win creative assignments.

Thus, many organizations focus initial in-house efforts on areas where the operations can clearly and immediately add value. Such services may include content curation and creation, digital, print and internal video production and the development of sales promotion and collateral material. Consolidating tasks such as these with an in-house team can improve a marketer’s agility by reducing project turn-around times and costs while improving the caliber of the output.

Many in-house operations begin as shared-services providers, subsidized by the organization and often with mandates for brand marketers to use their specialized services. Which is not a bad way to launch an in-house agency. Over time, some operations may adopt a charge-back model, where they must compete with external resources to win projects from their brand marketing peers.

Each model brings with it certain challenges. The charge-back model, with no corporate mandate for use, raises risk for the in-house team who must generate revenue to cover internal staffing, resource and real-estate costs. If the team cannot win work, their very existence may be jeopardized. And during competition for work, the team must address internal client perceptions that the services they provide will be less expensive than an external creative agency. On the other hand, if pricing is comparable to an external resource, brand marketers may question the risk / reward of transitioning work away from an established external specialist creative shop and bringing it in-house.  Additionally, end-user’s want to feel that utilizing their in-house agency “makes their life easier.”

Regardless of the model employed or the scope of services offered, it is imperative to embrace a strong project-management orientation with a comprehensive workflow management toolkit. The need to evaluate potential projects, provide cost and time estimates, log projects, manage projects and secure sign-offs requires a disciplined in-house project management function.

An important part of generating and demonstrating efficiency gains for the organization is the ability to track time-on-task, project gestation and completion rates, rework levels and the like…all of which require a commitment to recording and tracking in-house activities and utilization rates. Such information will also inform management on how and when to expand or contract staff levels and when to tap external resources to augment in-house skill sets.

The need for internal advertising support is real and makes a great deal of sense regardless of the breadth of services an organization seeks to source from an in-house operation. However, the application of the model requires a disciplined pragmatic approach to both set the breadth of service to be offered the team and to efficiently and effectively handle the anticipated volume of work.






Clean Up in Aisle 12. Sponsored by…

By Advertisers, Advertising Agencies, Digital Media, Marketing No Comments

Aisle 12Some of the world’s largest retailers have their sights set on garnering a larger share of the ad market. And why not. Amazon is expected to generate $11 billion in advertising revenue this year, growing to $15 billion in 2020 (source: eMarketer).

So it comes as no surprise to learn that other retailers have taken steps to shore up their ad platforms. In April, Walmart acquired Silicon Valley-based Polymorph Labs and their content sensitive digital ad serving and analytical capabilities to help strengthen its Walmart Media Group and Target is rumored to be interested in acquiring WPP’s Triad Retail Media unit to support its Roundel media division. All three retailers are actively courting advertisers and their agency partners to pitch the media and product sales benefits of their data driven advertising offerings.

On one hand, one might question why is this even newsworthy? Traditional retailers have long been in the ad business, selling advertising to the brands that they carry on in-store media, in weekly ad circulars, in price-item television and radio spots and in OOH. Thus the expanded focus on sophisticated, data-driven digital advertising solutions should come as no surprise.

That said, the potential to integrate target audience information with web browsing data, shopper data and location data to serve up relevant ads in an environment where consumers can immediately click-to-buy and receive their merchandise in a day or two has the potential to revolutionize the retail ad industry.

As retailers refine their offering and simplify platform use, they will quickly cannibalize traditional search and digital display advertising activity. Factor in the ability to tap retailers omnichannel databases, with the goal of refining ad targeting to drive digital media efficiency and the appeal of retailer digital ad platforms increases exponentially.

Consider Walmart Media Group’s pitch to advertisers; with “90% of Americans shopping at Walmart every year” and “160 million visitors” in-store and online every week, Walmart Media Group helps brands to “reach more customers at scale and measure advertising effectiveness across the entire shopping journey.” 

On the surface this evolution of retail advertising certainly appears to be a win-win for the industry. Retailers benefit from a new, high margin revenue stream that is largely technology driven, relying on automated platforms. For the agency community, specialist agencies are already coming to the fore that focus exclusively on assisting brands in assessing and realizing opportunities associated with these retailer digital ad platforms. And, from a brand perspective, serving up targeted ads in a brand safe, fraud free environment with the potential to immediately convert consumer interest to sales is a compelling value proposition.

Perhaps the greatest challenge for manufacturers as more retailers join the fray, will be to balance the ongoing need to strengthen their brands and for some, to build their own direct-to-consumer offerings, while funding their participation in retailer digital ad platforms. Make no mistake, while a brand may be able to build a solid business case for investing with their retail partners, retailer leverage over brands to influence whether or not they buy-in and at what level will be real as the balance of power pendulum continues to swing in favor of omnichannel retailers.





4 Appropriate Limitations On Agency Remuneration

By Advertisers, Advertising Agencies, Agency Compensation No Comments

gourIt is our belief that agencies, consulting firms, contractors, employees and yes, even auditors, are entitled to earn as much money as they can in return for services rendered. Further, we are agnostic when it comes to the mode of remuneration, whether those fees are predicated on a resource based, outcome-based or value-based pricing model.

We also recognize that client organizations have the intelligence and wherewithal to negotiate professional services agreements that satisfactorily address both their needs and their budgets.

That said, experience has taught us that sound Client/Agency agreements should also place limitations on the revenue earned by an advertiser’s agency partners. In short, agency revenue should be limited explicitly to those forms and amounts of revenue that are intended and accordingly defined within the agreement, or otherwise agreed to in writing by the client. Period. The end.

Unfortunately, in our contract compliance audit practice, it is too often that we find agreements which don’t effectively restrict agency revenue to that which has been negotiated and memorialized in the contract between the parties. This can lead to misunderstandings and in rare cases bad behavior on the part of professional services providers seeking to unjustly optimize their revenue yield.

Below are four examples of appropriate contract limitations for advertisers to place on agency revenue, once the remuneration program has been negotiated:

  1. An agency should not be allowed to earn money on the handling or holding of client funds. Examples of this could include the earning of interest or “float” income and rebates or bonuses earned from the use of corporate credit or purchase cards to pay third-party vendors for purchases made on behalf of a client.
  2. All expenses, including those for third-party commitments and out-of-pocket expenses, should be billed on a net basis, at the agency’s cost, with no mark-up allowed.
  3. Discounts, rebates or any other benefits earned by the agency, its holding company and or related parties tied to the investment of client funds and or prompt payment to third-party vendors should be remitted back to the client upon receipt of such benefit.
  4. For direct labor based fees, the agency should not be allowed to charge for employee hours in excess of the full-time equivalent (FTE) standard (e.g. 1,800 hours per annum). Quite simply, once the FTE threshold has been met, the agency has fully recouped employee direct labor and overhead costs and realized the agreed upon profit margin.

One further measure of protection for advertisers is the addition of contract language requiring the agency to be transparent, to fully disclose all transactions and the flow of client funds along with the presence of any rebates or incentives received by the agency directly or indirectly.

Please note, that the “limitations” listed above are not meant to restrict an agency’s ability to earn a fee that is reflective of their delivered value. The intent is simply to limit agency revenue to those sources agreed to by both parties, thus providing the requisite protection to the advertiser.

“Confidence… thrives on honesty, on honor, on the sacredness of obligations, on faithful protection and on unselfish performance.” ~ Franklin D. Roosevelt

Things Are Looking Up for Marketing

By Advertisers, Marketing, Zero Based Budgeting No Comments

momentumWhat do these seemingly disparate items have in common?

  • According to Gartner Research, North American and UK companies will spend 11.2% of corporate revenue on marketing in 2019.
  • Nearly two-thirds of CMOs are expecting to see marketing budgets rise this year.
  • The recent IPA Bellwether survey indicates that UK marketers saw an 8.7% increase in the size of their advertising budgets during the first-quarter of 2019.
  • Martech budgets will account for almost 30% of marketing expense budgets in 2019.
  • On the strength of its break-through brand building efforts Burger King is “cool again” proclaims INSEAD.
  • Former Anheuser-Busch InBev CMO, Miguel Patricio is promoted to CEO of Kraft Heinz.

In short, organizational confidence in both marketing and marketers appears to be on the rise and zero-based budgeting (ZBB) has helped, not hindered marketing’s resurgence.

By way of background UK marketers, including Unilever and Diageo, have been at the forefront in adopting ZBB, AB InBev is a ZBB organization, 3G Capital, which owns Burger King and Kraft Heinz has employed ZBB. And finally, martech budgets are soaring because organizations have driven out marketing budget inefficiencies, applying savings to fund productivity enhancing research and innovation initiatives.

Over the last decade or so, marketers had to renew their focus on demonstrating that the marketing function could in fact drive business, including both top line revenue and net profit. Importantly, marketers had to do this at a time when companies had shifted their focus to cost management and categorized marketing as an expense… not an investment.

The message sent to marketing was clear, budgets and the success of the CMO would be tied to achieving quantifiable results that supported the organization’s goals. For many firms, ZBB was an integral part of this process. ZBB provided a framework for eliminating unproductive costs and identifying areas, which better supported firm strategies and that were worthy of financial support.

At a time when “faster, better, cheaper” has become a guiding principle and where big data and technological advances are driving dizzying rates of marketplace change, building a successful marketing infrastructure has become increasingly difficult. Yet, there are numerous indicators that would suggest things are moving in a positive direction. The structure, processes and accountability that is part and parcel of a ZBB process appears to have aided marketing’s resurgence.

In the words of American economist, Emily Greene Balch:

The future will be determined in part by happenings that it is impossible to foresee; it will also be influenced by trends that are now existent and observable.”





Does Anyone Care About Media?

By Advertisers, Media, Working Media No Comments

trainingMcKinsey estimated that companies across the globe could spend in excess of $2.0 trillion on media in 2019.

A big number to be sure, and for most advertisers the media component of their marketing spend, which runs between 10.4% – 14.0% of annual revenue is a material SG&A expense (Source: The CMO Study, from Deloitte, AMA, Fuqua School of Business at Duke University).

Thus it was surprising to read the results of advertising and media consultant ID Comms recent survey assessing advertiser interest in media training. Seventy-one percent of the respondents indicated that the “investment in media training” by advertisers was “unsatisfactory or entirely unsatisfactory.”

Given that in aggregate, the survey respondents firms spend “in excess of $20 billion” on media globally, one might say that their response was stunning. This is particularly so given the scrutiny that has been given to media advertising in the wake of the Association of National Advertisers (ANA) 2016 study on “Media Transparency” that brought to light some of the financial risks faced by advertisers in this area.

So why haven’t advertisers stepped up their investment in building media competency? It would seem that advertisers the world over would place a much higher level of priority on the recruitment and training of media personnel to help them steward their media agencies to safeguard and optimize their media spend.

Media savvy marketing professionals understand that the cost: benefit proposition for staffing and training corporate media departments is quite compelling. In fact, the ID Comms survey went on to point out that nearly all of the survey respondents agreed that “brands can gain a competitive advantage in marketing” by elevating their firm’s media capabilities.

Companies have plenty of Chiefs, ranging from Chief Executive Officers, Chief Operating Officers, Chief Financial Officers and Chief Marketing Officers to Chief Risk Officers, Chief Procurement Officers, Chief Technology Officers, Chief Information Officers, Chief Revenue Officers and more.

Okay, so perhaps there is no room left in the C-Suite for a Chief Media Officer. No worries, build out the corporate media function within the marketing pyramid. No money in the HR budget to hire a seasoned media professional? No worries, bring on a fractional Corporate Media Director to assist in staffing and training the department.

The need is real.

What advertiser wouldn’t benefit from investing in the ongoing training and education of their marketing and or corporate media staffs? Honing capabilities related to setting media strategy, establishing KPIs, crafting a compelling media brief, reviewing media plans, evaluating media performance, building an understanding of the adtech sector and managing a diverse roster of media agencies would yield both near and long-term financial returns.

With the desire to improve “working media” in an increasingly complex marketplace companies would benefit mightily from building their corporate media proficiencies.

“Hire for passion and intensity; there is training for everything else.” ~ Nolan Bushnell




Two Simple Steps for Advertisers to Safeguard Their Ad Dollars

By Advertisers, advertising legal, Letter of Agreement Best Practices No Comments

simpleisgoodThe current advertising ecosystem is fraught with risks as the number of intermediaries grows, media continues to fragment and new specialist agencies come into being. The recent Chapter 11 bankruptcy filing of adtech provider Sizmek serves as a subtle reminder of these risks. At the time of its bankruptcy filing, Sizmek owed 48 different creditors in excess of $40 million for digital media inventory.

To protect their investment from the impacts of this type of event, U.S. advertisers should consider implementing the following two contractual safeguards:

  1. Establish a “Principal-Agent” relationship with your agency partners.
  2. Incorporate a “Sequential Liability” clause into your agency agreements.

Incorporating Principal-Agent language into agreements reinforces the advertiser’s expectation that its agency is beholden to “always act in the best interest of the Client” when entering into agreements with its affiliates, subcontractors and or third-party vendors.

Further, establishing sequential liability as it relates to third-party vendor payments protects advertisers from the failure of any intermediary to its vendors, for which that intermediary has already been paid by the advertiser. Advertisers must also require their agencies to provide notification of any third-party vendor that will not recognize the sequential liability relationship that exists between the advertiser and the agency. By way of caution, media sellers (for instance) often incorporate “No Sequential Liability” or “Joint and Several Liability” clauses into their agreements or purchase orders with agencies which contradicts or disallows this important advertiser protection.

While properly screening agencies and third-party vendors can dramatically decrease an advertiser’s risks, the aforementioned contract clauses will offer an additional layer of protection.