LONDON: Advertisers are uncertain of their digital ROI, with most receiving little insight from their agencies, according to a new study which argues for greater transparency in the digital media buying process.
The report, Minimising Wastage and Optimising ROI in Digital Advertising Digital, from marketing technology company AudienceScience, was based on data gathered as part of the first International Media Image Survey, from BSBMedia and The Vision Network, which polled over 300 network media agencies and advertisers with international responsibilities, including 240 agencies and 64 clients.
Most European advertisers accepted that digital was important but far fewer were prepared to commit substantial sums to it: TV and print continued to take the lion's share of the budgets of large advertisers (56%) while digital display, for example, accounted for just 7.5%.
One reason may be perceived problems in determining ROI. A significant 40% of those surveyed said they had yet to find a good way to determine digital media ROI, while a further 17% devolved that responsibility to their agency.
But one third (35%) felt their research proved digital media delivered a good ROI and that group was likely to coincide with the 33% who said that they received a fully transparent report of all agency and third-party fees and margins.
Most advertisers (63%) reported either no insight at all, or only high level reports from their agencies.
On the particular issue of fees, the study found that advertisers significantly underestimated costs associated with fees and media arbitrage. Publicly available data shows fees can be in excess of 40% per vendor, but four in ten advertisers thought that less than 10% of their media spend went on fees and vendor margins, while a further third said it was between 10% and 25%.
Ultimately the solution appeared to be transparency, with 40% of advertisers indicating this was the single most effective way to manage digital media waste, while 25% wanted a tool that provided them with more granular control of ad placement.
Worryingly for agencies, however, 27% of advertisers thought that cutting them out of the loop and bringing control in-house was the best way to eliminate waste and create transparency.
Mark Connolly, managing director EU & APAC at AudienceScience, noted that digital advertising had evolved in an overly complex way, making it difficult for advertisers to make the most of their digital budgets.
"Only by adopting enterprise technology that ensures transparency and control will advertisers be able to cut out wastage and achieve improved ROI from digital advertising," he said.
Data sourced from AudienceScience; additonal content by Warc staff