How The Pandemic is Reshaping the Transparency of Advertising

Advertising is a significant part of creating brand awareness as a part of marketing goals. Companies spend thousands of dollars on the market via various channels. As per the Gartner survey of CMOs, the digital marketing expenditure in Western Europe and the U.S. is about 80 percent of their whole budget. 

Moreover, research from 2018 from the Manifest concludes that 81 percent of companies in the U.S. spent a minimum amount of $50,000 per annum on digital marketing. However, about 41 percent of companies went overboard and spent $500,000 on the same. 

These numbers show the emphasis on marketing for better traffic. Looking at the current effect of the pandemic on online traffic and spending, we see a new high in the role of marketing service providers. In addition, the data collection and its use during marketing is an emerging factor for transparency in advertising.

For the past years, several companies were under the radar for the mishandling of user data. As a result, the users were more aware of their rights to demand changes in the policies. For instance, Facebook and Google increased transparency in the use of data for sales and research. 

As a result, the B2B interaction has similar queries in terms of ad fraud, brand safety, user data, and prospects. Another important question was where were these companies placing these ads and the actual costs of lead generation. 

Where is all the money going while investing in advertisements?

After a successful campaign of lead generation, it is still unclear how the budget is employed and how the leads are acquired.

The old school approach

The old school business models work around creating a campaign for digital marketing and getting new customers. They charge for these campaigns as the client is usually clueless about how this works. The clients convey the goals and results they expect from the campaigns so that the companies can plan for the upcoming marketing schemes. 

These may include acquiring new customers, new user registrations, downloads, services, or product purchases. In addition, the cost of each lead may depend on the competition, network, and the number of supply chains. Therefore, the agencies may charge the companies based on leads and the process involved in acquiring them. 

For instance, the cost per lead will vary as per the agency’s pricing models. These models may not be transparent even when the client is choosing the network. Sometimes, the clients may end up choosing models that do not benefit them. Despite the investment, the marketing agencies may be the ones benefiting from the partnerships and commissions.

After the results, the cost of marketing may seem justifiable; however, the client is still unaware of the authenticity and modes. Some companies suffer in the dark as several marketing agencies run programmatic advertising. This is not authentic as the automated system is involved in buying and selling. 

The marketers are looking for more

As per an ANA report from 2017, marketers were paying anywhere from 30 to 90 percent markup on media sold. Advertising supply chain were so overloaded that only 45 percent of revenues made it to the ad publishers.  This was enough to satisfy the marketers for some time as they did not know about the complex world of digital marketing. Besides, the clients were unaware of the advertisement mediums and the agency profits.

Impact of lack of transparency due to pandemic

Passing the dark programmed system of marketing, clients are gradually becoming aware of the lack of transparency. Over the years, they have seen changes and inflation in the advertising supply chain costs. As a result, more and more people started speaking against the lack of transparency, including P&Gs chief Marc Pritchard. 

There are several issues with the internal supply chain which are complex to change. Besides, the general media buying space and programmatic advertising still have not changed even after such online movements. Only 51 percent of the advertiser revenue reached the publishers in 2017. This was just a six percent rise showing the overall lack of improvement in the system. 

Pandemic is acting as a guiding force

Achieving a hundred percent transparency may seem impossible; however, agencies are forced by the pandemic need to change. They may need more authentic and transparent measures to stay in business. The exchange of hidden information and no data on the expenditure will no longer be entertained due to the rise in marketing demands. 

Currently, we see a slight change in the transparency, use of the actual advertiser’s budget, and authentic marketing. The pandemic has led to an increase in the digital marketing budget due to the rise in demand. Hence, the clients will expect more transparency with agencies. 

Many companies may follow the footsteps of P&G in reviewing their contracts with different agencies. A substantial digital budget will ensure they exercise their right to information and transparency. 

Offering the same services 

Moreover, the rise in demand will ensure more transparent policies in supply chains, agencies. This will lead to all agencies acting in uniformity and offering the same services. Besides, they will focus less on commissions and on providing quality services. 

Furthermore, these companies may cut down on the supply chains and management teams to compensate for the loss of extra commissions. They may choose in-house services instead of dealing with several ad agencies. 

Apart from this, companies may start working with agencies that focus on performance marketing business models. This way, they will be able to gain more control and work with a subscription-based business model. 

These models ensure the companies have direct access to the records of expenditure. Moreover, they work on optimized platforms that offer high transparency to see the movement of every single dollar. Therefore, the companies will no longer feel tricked in the dark. 

These measures may help in achieving some reliable level of transparency. Besides, staying optimistic in changing old ways may lead to a more significant impact. Eventually, more agencies will follow and change according to the needs of today’s world. They will need to keep the impact of COVID-19 in mind when working on performance marketing plans. 

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