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A Digital Conundrum

A Digital Conundrum

Is digital advertising really effective?

Honchos of two FMCG behemoths, Proctor & Gamble and Unilever, have sparked off a global debate on the safety and efficacy of digital advertising.

Marc Pritchard, Chief Brand Officer at P&G, recently called it "murky at best, fraudulent at worse". He admitted his company had succumbed to the "latest shiny objects" without realising that the digital media buying chain lacked transparency. Pritchard pointed out that more consumers are installing ad blockers on personal devices due to "crappy advertising" and contested the claims of Facebook and Twitter, which offer their own measurement metrics.

Keith Weed, Chief Marketing Officer at Unilever, in his keynote address at the annual meeting of the Interactive Advertising Board (IAB), said earlier this year: "Unilever will not invest in platforms or environments that do not protect our children or which create division in society and promote anger or hate. We will prioritise investing only in responsible platforms that are committed to creating a positive impact in society."

The concern of the two stem from advertisements being served alongside objectionable content on platforms such as Google and YouTube. A report by the Association of National Advertisers in the US also talked about lack of transparency in the $200 billion digital media buying industry. "The study highlighted that digital media buying is actually not as clean as one thought it was. So, digital platforms would go to a big agency and say I want to pass some of my digital (inventory). They would tell agencies that if you spend $1 million with me, as a group I would give you a 5 per cent kickback under the table. All of a sudden this way of trading has taken off on a global basis," explains Terry Edwards, Co-founder and Global Media Director, Firm Decisions - a marketing contract compliance specialist consultancy.

Now, if an advertiser gets one million likes for an advertisement on a social media platform, it is quite possible the media agency would have bought the 'likes' and the advertiser wouldn't know - after all, media buying agencies don't disclose how they bought digital inventory. In most cases, media agencies don't buy inventory from platforms individually, but in bulk from aggregators such as Google or Facebook. "Google serves ads to multiple platforms. Its software interface follows consumers wherever they are going and serves them ads. So, if a sports brand wants to target 18 to 24-year-old football fans, it will follow the target group, through Google to the sites they visit, and you never know if some of those young fans consume content put out by an extremist group," explains a senior marketing professional. The controversy around Google and YouTube had led to several large advertisers - such as P&G, Unilever, Johnson & Johnson, McDonalds, Starbucks, AT&T - to temporarily withdraw advertising from these platforms in the US and UK. When they returned, they started asking serious questions about safety and efficacy of digital platforms.

In India, digital advertising grew 32 per cent last year. It is currently 15 per cent of the overall ad pie (Rs8,202 crore) and is expected to be worth Rs18, 986 crore by 2020. It is expected to be 24 per cent of the advertising expenditure by 2020. That is a huge chunk for advertisers. Moreover, Indians are increasingly consuming content on digital platforms. But Indian advertisers, too, have had their share of bitter experiences with digital media. ITC recently got into trouble when a fake video of its Aashirwad atta went viral on social media. The video said the atta contained plastic and impacted the brand's market share by a few percentage points.

ITC got a court order passed against circulating fake videos on the brand. "We had also reached out to Google and Facebook to pull down fake videos, supporting our case with relevant data. However, we realised it is tedious and time-consuming to get videos removed. We had to reach out to the legal system to pass an order against spreading of such malicious content and then had to use that to convince both Google and Facebook to do the needful," adds the ITC spokesperson.

Recently, Jet Airways, too, was hit by fake digital ads. A WhatsApp message claiming the airline was offering two free tickets to celebrate its 25th anniversary went viral. The airline took to Twitter to declare that it was fake. In November last year, when IndiGo was in the news for the manhandling of a passenger by a staffer, an ad with the Jet Airways logo, that said: "We Beat Our Competitors, Not You", went viral. The airline even then had used Twitter to spread the message that the campaign was not commissioned by them and it was against their ethos. "The reason this kind of fake content goes viral especially on platforms such as WhatsApp, because it is encrypted and one is unable to know who the originator of the content is," explains a senior marketing professional.

Advertisers are increasingly concerned on the efficacy and safety of the medium. They are beginning to ask tough questions, admit media agency heads. "With many global clients whose advertising budgets are upwards of Rs1,000 crore, we have disclosure models where we tell them how we buy, but ask for a higher fee. In digital, the volumes are huge and it involves multilevel transactions, so we need a higher fee. With smaller clients we have a fixed rate deal. We tell them where we buy and how we buy is our headache, but we give them the best deal," explains Shashi Sinha, MD at IPG Mediabrands. Sinha agrees that digital media buying lacks transparency. "Digital media buying needs far more time, effort and specialised talent, which is expensive. Therefore, I tell the client that either you pay me more or do big volumes with me, which I will trade off," adds Sinha.

There is a transparency issue, admits Ashish Bhasin, Chairman, Dentsu Aegis Network. He attributes this to many fly-by-night operators trying to make a quick buck. "If I am buying impressions on a digital media platform, assuming that 100,000 human beings would be viewing it and out of that 50,000 were robots fooling around, then to me it is a loss. I have to know what I am buying." Apurva Purohit, President, Jagran, claims that digital advertising spends have plateaued among serious spenders. "Advertisers are not getting the returns from digital that they hope to, and are questioning how to use this medium," she says.

SUNIL KATARIA Business Head (India & SAARC), Godrej Consumer

Sunil Kataria, Business Head (India & SAARC), Godrej Consumer, says he is constantly in touch with his media-buying agency about safety and viewability. "The publisher can't compromise with it, and has to be extra careful about serving the ad context. We have worked with our agency and negated 800 key words." R.S. Sodhi, Chairman, Amul, calls digital advertising a hype. "We do need digital advertising to reach out to millennials, but am not sure how effective it is."

Sashi Sinha MD, IPG Mediabrands

Digital Muck

Digital advertising is being considered murky, even though an advertiser can get to know how many times a consumer has watched its ad. In traditional media, the agency keeps 2-3 per cent as commission. It's straightforward and transparent. However, when one is spending Rs100 on digital, on an average Rs72 gets spent on the media, while Rs28 gets spent on the intermediaries - the agency, the buyer-trading desk and the seller-trading desk. "Out of the Rs72 to be spent, around 30 per cent are fraudulent clicks. Therefore, just 50 per cent of what the advertiser has spent actually reaches the consumers," explains Vineet Sodhani, CEO, Spatial Access - a media audit and advisory firm, who claims most marketers are actually not aware of the spillage.

The big challenge is lack of a common measurement tool to measure whether a digital ad on a platform is actually effective. Today, you go to an aggregator to buy inventory and eventually have no idea about which platforms the advertisement is being served on and who is watching it, unlike TV. The digital ecosystem is a black hole. All digital media platforms have their own measurement metrics in place. "We have a long history of providing neutral, agnostic measurement systems for the industry - from Google Analytics to DoubleClick. We also work with third-party measurement partners like Nielsen and ComScore and validate our own methods," says Vikas Agnihotri, Director, Google India. Similarly, Amit Goenka, CEO, Zee International and Z5 Global, also claims that ZEE Entertainment's over-the-top (OTT) platform, ZEE5, has plenty of tools and trackers that provide advertisers with relevant data on campaigns. "We also have tools in place that track and report whether ads been served or not. So, advertisers get a good sense of the efficacies that are being delivered by the campaigns we run."

But measurement tools offered by media owners are their own, and the advertiser has no option but to believe what the media owner is saying. In the words of P&G's Pritchard, media owners are "grading their own homework".

Why Digital?

So, why are marketers looking to increase their spend on digital advertising? Digital consumption is obviously on the rise and marketers' money has to chase the media its consumer is moving to. Even people living in Tier- II-III towns are spending considerable time on their mobile screens. Moreover, digital offers more measurability - even though it's a grey area - compared to other media, in terms of clicks, likes and number of downloads. "For a media planner this became attractive, as he gets an opportunity to prove to clients instantly that his campaign was effective as it attracted downloads and clicks," points out Purohit of Jagran.

While TV and print are ideal to build reach and awareness, the role of digital is to build engagement. However, most media planners look at digital to build reach and not engagement. Purohit says that this mistake has been committed not just by media planners but by media owners, too. "The mistake was chasing quantity. It's only now that all of us are realising engagement is equally important."

Menon of Spatial Access believes media agencies make high margins (anywhere between 5 per cent and 15 per cent) on digital and that's the reason they push advertisers to invest in the medium. "Part of the success of digital is higher commissions and lack of transparency in digital media buying." Advertisers, too, don't want to miss the digital bus despite the grey areas in measurement. "Consumers won't change their digital consumption just because there is no measurement currency. We have to learn to work efficiently with the limited tools," points out Kataria of Godrej. "For us to say that we don't want to be on digital would mean that we are not consumer- friendly," agrees Anuradha Aggarwal, Chief Marketing Officer, Marico.

Godrej Consumer, for instance, uses Nielsen's Digital Ad Rating tool that gives details about whether the ad served has been served to the right target audience and a fair understanding of return on investment (ROI). "Within 48 hours of the breaking of the campaign, the data comes in. We have a number of large- and medium-sized advertisers subscribing to this tool," says Dolly Jha, Executive Director, Nielsen India. Though the BARC industry approved measurement tool is likely soon, Jha says confusion over measurement will take a while to be sorted. "Getting super perfect measurement will take a while. But advertisers no longer need ratification whether they should use digital platforms to advertise. They have moved on to asking sharper questions. Can you tell me the ROI, is what they want to know," points out Jha of Nielsen.

Advertisers have even started putting their own measurement metrics to get the best out of digital media platforms. Peshwa Acharya, Chief Marketing Officer, Sterling Holidays, says: "We created our own digital funnel. We just don't go by the measurement metrics offered by the platform." Savvy brands don't need middle men, asserts Mukul Vasnik, Chief Digital Officer, Arvind Brands, which spends close to 30 per cent of its advertising budget on digital. "We directly buy from the platforms. It is better we protect our consumer's interests directly," he says.

However, Ravi Deshpande, Founder, Whyness, says digital advertising continues to be a side dish. "This medium will flourish if marketers put quality money in ideas, in the content we create and the strategies we create. It doesn't happen at the moment, hence you haven't seen the efficacy of the medium." Most advertisers don't understand the way the media should be treated. Chasing a consumer with programmatic ads (almost 70 per cent of the overall digital ad pie) often backfires. "If the quality of content isn't breathtaking, you will fail to create that connection. It is unorthodox creativity. One can't create linear, structured content and expect people to respond," points out Deshpande.

It has to be ensured that digital is a conscious part of the strategy of a particular brand, according to Tarun Rai, CEO, JWT - a marketing communication company. "There is a role for the media you are taking. It should fit into your overall media strategy. If you don't do that then it is wasteful," he says. The lines between entertainment, content, and advertising are going to get blurred, asserts Rai. No wonder digital media owners are now investing on content and trying to integrate advertising into it. Facebook's Rs3,000 crore bid for the IPL digital rights is an example. The social media giant has realised that blatant brand messaging doesn't work. OTT platform Arre, for instance, makes large portion of its revenue through branded content. "We are seeing a shift in advertising from vanilla display ads to richer ad formats and video advertising, resulting from the growth in consumption of video content," says Jaideep Singh, Director, Arre.

Tarun Rai CEO, JWT (Photo: Rachit Goswami)

Will digital ever replace traditional TV and print ads in India? Unlikely. "I don't think TV or print will go out of fashion in a hurry. I can't see India's largest auto manufacturer saying that they will invest only in digital," says Sinha of IPG Mediabrands. For digital advertising to be a quarter of the advertising pie in 2020, it needs a common measurement tool. But putting together a fool-proof tool is not easy. While the BARC tool could give clarity on how many people have viewed an ad and whether it has been served alongside good content, it won't tell advertisers whether ads were viewed by humans and not robots. It remains a big stumbling block.

ASHISH BHASIN Chairman, Dentsu Aegis Network