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Brands need 'chief media officer'

News, 19 July 2016

NEW YORK: Brands should appoint a "chief media officer" to ensure agency spending decisions and relationships are based on accountability and transparency, a report from the Association of National Advertisers (ANA) has suggested.

The ANA's study, entitled "Media Transparency: Prescriptions, Principles and Processes for Marketers", follows on from research published by the trade body last month, which argued "non-transparent" practices and rebates are common among media agencies.

One recommendation for advertisers made in the ANA's latest study involves appointing an expert in digital – as well as other "complex media issues facing advertisers today" – to oversee the media discipline.

"Clients should appoint a chief media officer (either in title or function) who should take responsibility for the internal governance process that delivers media accountability and transparency throughout the client/agency relationship," it said.

"On the most fundamental level, the chief media officer should drive the media strategy, partner with external agencies, and work with third-party suppliers to optimize the media mix and maximise ROI."

This idea featured in a wider slate of guidelines for client-side executives, who were also encouraged to become more active "stewards" of their media outlay – such as by training core staff members in media management.

Marketers require greater expertise in this area, in part, because of the growing gap between shops serving as agencies that buy media for a brand, and as "principals" making these buys in their own name, and then selling inventory to clients at a profit.

"Where the advertiser agrees to the agency acting as a principal, the advertiser should have disciplined, reliable processes to manage the potential conflict of interest," the study said.

Further proposals in the report – which was produced with analytics firm Ebiquity and its FirmDecision unit – included finding the "right balance between flexibility and financial and operational transparency" in client/agency contracts.

Advertisers, it continued, ought to possess "robust and far-reaching audit rights", meaning they can get a clear read on compliance and the media value delivered by their agencies.

More broadly, marketers need to pursue rigorous "contract governance" based on – among other things – conducting regular reviews of existing agreements, agency performance and their own business needs.

In reflection of the technological changes which have transformed the marketing ecosystem, all media-planning data should also be transparently sourced and understood by clients, the study stated.

Clients should, equally, be able to access any platforms, tools and datasets used in programmatic trading, and in measuring the results of any campaigns. Advertisers need to maintain ownership of all data concerning their businesses, too.

Additional considerations for brands include making sure agency compensation is "fair and reasonable", and that payment terms are guided by similar principles – failings which have pushed agencies to generate revenue from non-traditional sources.

"We outlined actions marketers should consider to diminish or eliminate non-transparent and non-disclosed agency activities and to ensure that their media management processes are optimised," said Bob Liodice, the ANA's President/CEO.

Data sourced from ANA; additional content by Warc staff