44. Why Marketers Need to Embrace Better Media with Tom Denford

It's become really complicated. And sadly, it's kind of full of more risk and a lot of money. And so, as you said, we're a management consultancy that advises brands on media and advertising. And we feel that's our mission to bring to a CMO or a marketer that motivates my team is that we can help your brands Get a better result in media. And what we mean by that really is just, it's more effective.

You know, we want your brand to be disproportionately more effective than any other brand in its category in media, which is a big part of your investment. Uh, it's a big headache that you want to go away. And so we call it untangling and de risking. So if we can untangle media for you, just to make it. Transparent.

And so you can see actually what's happening, remove some of the waste and the risk, and you've got more marketing firepower from your media budget, and that should help grow your brand. So better is a very broad, you know, that's a quite subjective measure, but better acknowledges that it's not good enough. And then actually it can be a lot better. And what, what we like about that phrase particularly as well is that it's a kind of binding narrative for the whole industry.

You know, media has become very, very fractured brands, accusing their agencies of lack of transparency and agencies kind of fighting with publishers about these kinds of things. And it's not the sweet harmony that we, that we want in the industry. And so. We try and remind everybody as well, that we're all in service of a common thing.

We're all in service of the brands that we love, and that sounds a bit kind of woo woo, but like we have to remind ourselves, like, let's just come to the table because we're just trying to serve brands at the end of the day.

Um, our ambition is not to get in the middle of those, but just to make sure that we construct highly productive and profitable relationships between those two, that's just really transparent and in service of the brand.

Of course, now there's hundreds or thousands of different places that you can spend your media time. Now, that should be a good thing for a marketer ultimately, because as people gather around particular types of content, if you're really into, I love sailing, so if you're, you know, if I, if I read sailing magazines or go on sailing websites or follow, you know, accounts on social media that to do with sailing, I'm there to, you know, you could sell me sailing things, right?

So it's a really good way of understanding audiences, their media behaviors, and, When they're fragmented out, that should be a really good thing. Um, actually it's quite difficult. It has been quite difficult for brands to, to do that. Uh, which I'm thinking some of the complexities that we've probably come on to talk about. But that's been the major change is that where we spend our time is just fragmented into these like far smaller pieces.

And so you have to do, there's a lot more analysis required to understand how people are consuming, what type of content, and as a brand That segmentation, media segmentation, and understanding who to target as, as potential valuable customers is a big industry now in itself, you know, doing an analysis of media consumption data and trying to link that back to your target customers.

Uh, what's your thoughts on that in terms of medium, like other than TV or prime TV, um, or, uh, streaming platforms, where do you see brands putting more money behind right now? Is it podcasts, which Well,

But now these are reaching large audiences, regular and predictable and sustainable audiences, which is really what the brands want. What they want are scale audiences to reach lots of people in predictable and safe ways. And that's podcast is, has grown really nicely into that space. It's really just radio. But a bit extra, you know, I talked to a lot of marketers sometimes about actually what types of media, what they do, you know, podcast.

I really love because it's a very intimate type of media is what we would call like a me media. When I'm listening, it's just me listening. Yeah. Like maybe you grew up listening to the radio. You know, when you listen to your favorite station on a radio station, the host of that is talking to you. I know that you know that lots of other people are listening, but it's a very intimate thing and you may have like headphones on or you're listening whilst you're in the car or something like that.

It's normally a mediates consumed. Individually on your terms and typically around something that you like a topic you like, or a host that you like, or somebody telling a story that you like. And that's a really lovely environment to put your brand in.

And the way that can be activated on podcast is beautifully creative because you can have On air mentions, which are always really effective because you have a relationship with the host that's talking to you and when they talk about a brand that comes with an extra special wrapping of endorsement and just running traditional ads like pre, during or post a podcast is an understanding of the listener that that's how you get content, you know, we, we are used

and we do accept ads running before the things that we want or in the things that we want, because we understand that we get those things for free. Yeah, as a result. So it's a very pure type of media and I'm not surprised that it's grown. It's a very on demand version of radio. Um, and that, so it's got a, it's got a particular feel. I think it's interesting for, for marketers to really think about podcasting as a, as a really powerful platform to now get reach.

It's different to TV, but as it potentially is impactful as a TV. I mean, that's why it's grown so much.

Considering that radio was quite small 10 years ago. I'm just thinking about the fact that brands now need to learn. How to create right formats for audio as well, because it's a completely different world. One of your posts, uh, it got my attention. So I'm going to read the first few lines, uh, and then we're going to, we can talk about the media agencies pitches and so on. It says, are we living in a city of discounts who set the low, low bar for the media quality?

How did we end up giving up on context, placement, environments, partnerships as important media concentrations? Uh, I think you. Talk about the race to the bottom and then reversing it to the race to the top. Can you talk a bit about this?

And for most marketers, what they spend on media, I mean, for those listeners that are not marketers that haven't touched the kind of the budgeting challenges of marketing is that 60, 70, sometimes 80 percent of your money is media. And it's typically the area they know least about, but it's the largest single investment. And for a lot of companies, it's the largest or one of the largest single investments companies make across all of their costs.

Um, so media is really important, but it's The starting point is it's generally great. And there's a couple of reasons for that. One is that it's so complicated and they don't really understand and they can't see what's necessarily happening. And secondly, they're working with a very complex supply chain that really is trying to do one thing and that's deliver cheaper and cheaper media.

So most brands have been trying to treat media as a commodity really, and trying to buy as much, as many media impressions as they can for the least possible cost. And when we talk about the old fashioned media, you tended to kind of know what you were buying.

Now, it's got so complicated, you often don't know what you're buying, you don't see it, you don't have a sense of it, you just see it on a spreadsheet or a report, and opens up lots of risks to very low quality media, fraudulent impressions. You know, websites that will take your money and then issue hundreds or thousands of banners on a particular site.

For example, we have these, these phenomenal called made for advertising websites, which are, have a very, very heavy ad load, which is a little bit of content and tons of ads around it. You've probably seen these kinds of things and lots of things pop up and you have to keep clicking to refresh the page. These sites are really just designed to take advertisers dollars and they're not effective at driving any kind of. Actual customer response.

Um, so the marketer beware a lot of your money is being wasted. The reason that I kind of wrote this post is because as an industry, we've become a bit obsessed with trying to get under this low bar of cost. And I think some things are to blame. I think one of the things is, is the traditional kind of audit community of media have just turned media into this commodity that you have to kind of measure in terms of how cheap it is. And that's the only thing.

And marketers have been told that cheaper media is better media. But like anything in life, you know, you get what you pay for. So if you want, if you continually want cheaper media, then the quality of that has to degrade. And the way it's degraded is that there are more ads on pages. Ads are loading behind other pages. There are bots that create ad clicks on banners. They're not even real people. And marketers are buying this stuff. They're paying for this because they want cheaper.

What we want to do is And what we try to do as a business is shift in the marketer's mind, this idea that you have to get media under a low bar of cost. And set a high bar of quality, which might cost a bit more, but we have to show to the business that that's effective at driving some kind of outcome.

And then if you can show that and you get the marketing organization thinking more in that way, then you're more likely to continue to invest in media that drives an outcome in the business and you'll see the impact of that.

I mean, rather than starting the discussion, okay, look how cheap I got uh, views or impressions with. What should be the narrative from the marketer's side?

Okay. Brands invest collectively over a trillion dollars a year, each year in advertising, a trillion dollars that puts advertising in the top 20 countries by GDP. That's a lot of money. And about 60 to 70 percent of that is media. Okay. And how that gets applied and deployed comes back to you as the CMO. Okay. What standards and what narrative will you set for media? Because if the narrative is, It should be as cheap as possible. Then that pervades across this entire complex landscape.

And every, everybody is trying to get the CMO a better, cheaper media, right? Keep a deal immediate. If the CMO says, actually, we care about media. We care where our brands show up in the world. Really important. You have to tell people that you care about media. And you care where your brand shows up in the world because media is where your brand is going to show up. Media is how your brand behaves in the world. So it's actually really important.

So you don't want to spend too much time getting into the details of CMO. We just want to know there's less risk and that. It's working as hard as possible.

So if you can get the CMO to say, and be prepared to say publicly or it's within their organization and direct this long tail supply chain, actually, we care about standards here that goes a long, long way of changing the behavior of a big, big, long supply chain, uh, because the pervading and the conventional wisdom is that media needs to be as cheap as possible to keep markets happy.

But that's, if you sit with a marketer, And you say like, here are the implications of that is buying counterfeit impressions, maybe fund funding, you know, disinformation, misinformation. You're pulling budgets out of funding, quality journalism. You're buying your, your, I mean, this is where your money goes, right? It goes into the hands of crooks who are using a selling fraudulent advertising. Marketing budget is flowing into these places.

They probably don't want, you know, your ads are showing up in, you know, On websites and around videos that you don't want them to be associated with. So if you care more, you tell everybody that you care more, you set a higher standard for everybody. And then often companies like us will come in and actually set specific guidelines that everybody can follow that are quality thresholds.

And then we measure, forensically measure every dollar that's spent, every impression that's acquired, and then we grade it according to that, to those quality thresholds. So. You can continually see what's the poorest quality or the poorest performing media inventory cut that reinvest it back in the brands. And so you're continually optimizing and doing better work. And that's that's where it starts. But it has to start right at the top with the marketer.

So I feel that as much as we consider, uh, creating good content, uh, and good ads, uh, I think it's important that we deliver them to the right places, which is like, uh, the narrative doesn't start with the, uh, price narrative starts with who's going to see this and which platforms are we going to show this, um, done in that case, like for a brand.

To do media investment, trust is a very important because you talk about fraudulent ads, uh, about places that, you know, you get impressions, but actually it's the bot who is weaving your ads. How can we solve this? I mean, like, is it to go to the right media agency then, or what's the solution to that

Um, that's what we call the supply chain. That's really, it's grown. To optimize on price. It exists to generally optimize on prices, to get you something as cheap as possible. The irony is, is that there are often dozens of different companies that are then touching your money through that chain and they all take a little bit of it as well. So what gets to the end is, is actually a lot what you thought.

Um, and there's some good analysis that's going on with the trade associations, kind of looking at that supply chain and where some of those losses are. And we try and. Uh, guide marketers to reduce that, reduce all the different touches, uh, on their money. That's maybe not adding value. So right now that supply chain is really optimized to find lower cost. And as a result, it's become pretty untransparent.

If you as a marketer flip that and you tell your supply chain, you tell your media agency and you tell your media vendors and your publishers that you care about quality, you care where your brands show up in the world, then what happens is that that. Whole supply chain becomes engineered around putting the right brands against in the right places to reach the right people back to what it should be so we can get there and we are seeing movements towards that.

And I'm optimistic that that's the way, but it's just got to start with that narrative. Your media suppliers are not going to. be focused on quality if you're still focused on reducing price. So you've got to first off change that narrative. Marketers have lost trust in their media supply chain, but they've lost trust because it's got so complex. They don't understand it. And they often feel like they can't get a straight answer out of anybody about how it's working.

And so perhaps that's why companies like us exist. We're independent and objective observers of what's happening. And we work for them. To tell them and unpack what's happening so that they can see it and maybe have a bit more confidence in what's going on. Um, but trust is the currency of our, of any business. And when a marketer doesn't trust with their media suppliers enough, then I think that's a problem.

Needs to be addressed and it only gets addressed any relationship is that you have to build trust over time and it comes from consistent positive behavior. And so if the supply chain is more transparent, can give the market a more visibility of where their money goes and what works and what doesn't, and they can optimize to their ambition to. Optimized for quality and not cost. And I'm confident over time that trust will be rebuilt, but it's really difficult at the moment because.

You know, marketers being asked to now trust, not just trust a supply chain, but also trust a supply chain with a layer of AI on top of it, which makes it more complicated. Uh, it's another layer of complexity, which is giving marketer a headache. What we find is that they tend to do one of two things probably like most people is that you either reach in, you lean in and you take control as a marketer, and there are some very great.

You know, Mark Pritchard at P and G is a, there's a leading marketer and a big advertiser, major advertiser, hugely influential. He and his organization have rolled their sleeves up. They've leaned into media complexity. They've unpacked it themselves and they've taken control really, and they've built some internal capabilities to manage media and they've demanded, you know, transparency and alignment of their, of their supply chain. And there's a few other brands that are doing that.

Building capabilities internally, broadly taking control of media. And that's one route you can go as a marketer. The other route is to Before

Well, the, yes, there is where the ad shows up, so they still need to obviously have, have publishers and they may have some technology relationships and they may have some direct vendor relationships, so they still need some external partners. It's an interesting challenge. You know what the role is then for the media agency. So that media agencies themselves are having to adapt and think ahead about what role they play as more advertisers. Decide to buy media themselves or buy it directly.

So that's a, that's an interesting challenge for the media agency. Um, but it's, you know, we're, we're five or six years in now to this in housing journey, I think it is a, it's a continuing trend. And I think people suggest it's some kind of pendulum swing that there's, you know, brands take control, then they go use agencies and they bring it back in. So we're singing generally that. It's building within brands.

Most brands now, I think almost every brand I've spoken to in the last five years has some kind of internal capabilities

It's just to ignore it and bury your head in the sand and hope it will go away. And it's somebody else's problem. And there's a lot of people still doing that. So a lot of marketers might listen to this and think, okay, well, that's a problem for another day or another year or I'll ask, I have a media team that does all of that or have an agency that does all that.

I don't have to think about it, but it's shifting the issue further down the line, kicking it into the grass or, you know, making it somebody else's problem. Um, so it's definitely an option. We wouldn't recommend it. Because the risk there is that your competitors are better at media. You know, 60 percent of your budget, 70 percent of your budget is going in media.

If your competitors have figured out how to do it a bit better than you, if your competitors media is more effective than you, if your competitors are wasting less money on media, then you're going to be at a disadvantage over time because that gives them competitive advantage. It's so much money absolutely comes down to where your brand show up in the world, how you actually connect with.

People, it's fun to make the ads and it's great to make great ads and you can become a great marketer and very famous making great ads. At the end of the day, you've got to sell some stuff and you've got to change behavior. And so those great ads, your messages, your brands that you've built, that we all love, they've got to reach people. And media is such a simple idea that's been made incredibly complicated.

Uh, and I, I feel sad sometimes and marketers don't Don't find media interesting, you know, because the principle of taking your product to your brand to customers should be very exciting.

One of them is you mentioned about so many touch points between the brands till the customers then in terms of media buying, since all the technologies, AI, and many of the things happening. And also there's like a, still a race to the bottom to decrease the prices. Where do you see the future of the media agencies? I mean, are these touch points getting less? Uh, or does it require like a big change in the dynamics of our, or how media companies structured?

Kind of got involved in the selling of media and not just the buying of media. So most media agencies, not all media agencies, because some very rightly kind of stand up and say, we don't do that at all. We just do that. We just work for the brands and we work wholly in the interest of the brands, but some media agencies are, have created new revenue streams by taking either unsold inventory. Or additional things that they can negotiate and repackaging them.

And then kind of selling those on at some margin. And the margin is often undisclosed, selling those back onto their customers, to their clients, to the advertisers. And that looks like it's a win win in the sense because the publisher sells things that maybe they couldn't sell. The agency gets to add some value and make some money. And in theory of value add, what happens is that the advertiser can sometimes buy. That media cheaper in these undisclosed ways than they could do elsewhere.

So it looks like they're buying something cheaper. So we have this whole world where cheaper media is being again, funded, but everyone's making money from it. So it seems slightly, slightly perverse. Let's say that things can be cheaper and cheaper and we can make more money doing it. Um, so that's created an interesting dynamic. I mean, media agencies are incredibly entrepreneurial and they're always trying to find new ways to get. You know, brands in front of customers.

And I believe that most, almost all media agencies are working in the interests of brands. They believe in this idea that they're helping brands reach customers and. If they can find media opportunities and package them and sell them to brands and that helps brands reach consumers cost effectively, then maybe that's not a bad thing. However, it's more lack of transparency. That's the thing. And so the marketer doesn't really know what they're buying. Or what they're paying.

And so it's very hard to then take a judgment on, are we buying really what our brand needs? And are we paying a fair price given the impact or the quality of that? So it's an interesting moment for media agencies. I mean, I say to agency CEOs, I talk to analysts like market analysts quite a lot is that ultimately agencies will media agencies will have to decide long term whether they really want to be, you know, the buyers of media or the sellers of media.

I think at the moment, a lot of agencies kind of think that they can do both and they're. Maybe it'd be quite successful doing both, but then the privately, the marketer is saying that's not an ideal thing, right? We don't really like the idea that the company that's supposed to be buying media is also heavily invested in selling media as well.

Because, you know, is there a risk that they could be selling us things that we don't need, you know, do they put things on media plans that are really things that they want to sell or that they think that we should buy? And there's confusion there long term that's not sustainable. And I think in an environment where it's easier and easier every year for marketers to build their own media, media management capabilities internally. buying their own media.

That's a big question for agencies is like, what, you know, what role are you going to play five years from now? Are you going to be a seller of media? Are you going to be a marketplace, which is a totally valid thing, but let's just be very transparent about that. Are you going to be a marketplace or are you going to be, you know, a consultative value add, uh, service that supports brands?

in achieving their ambitions, you know, directly as an advisor, which is often really what the marketer wants from their agency.

So let's assume that I'm a smaller brand and I just started investing in social media ads, which is like a very small portion. And, um, Even someone at the team can do that, but there's like a path that you have to take once you start spending some money on media, then as you grow, you would need some better hands where then you just go to a media agency. What do you suggest for a smaller brand that is just about to start investing more in media?

They just go and search for media agencies, which is. or should they search for companies like you or consultants like your team? What's the path for a smaller brand?

And if you want to do it yourself as a small growing brand, You don't want to work with a consulting team like ours, you can do some of this yourself, which is you've just got to be really clear what you want, really be clear what you want from an agency, because there's, there are agencies for everybody, you know, there's all different types and size and scales and different capabilities and expertise. And the first thing is to decide actually what you need.

And really the best way to do that is to just sit for a second and just think how you work internally, because really what you want is an agency that And enhance what you currently do. We look at a lot of relationships between brands, like big and small brands and their agencies.

And we find that where there are issues is either because they overlap, they're trying to both do the same kind of thing and they get in each other's way, or there's gaps in scope and there's things that drop through the cracks that they don't, not sure who's doing what. And most of the. Kind of dysfunction, a procedural, operational things, and you just can't let, and there's too much at stake here.

There's a lot riding on brands and advertising and you've got to have agencies or an agency that is really closely aligned with what you're trying to do. And then you set up a very clear scope of what the agency does and what you do, and then you can work productively together. It should be precision engineered. It's worth taking a lot of time just thinking about that. We say to marketers all the time, please do not go shopping for an agency.

It's like walking into a grocery store and without any idea of what you want, you know, what happens, right? You just end up buying everything. Okay. Ikea have figured that one out very well. Like if you don't know exactly what you want, you come back with everything. So the worst thing you can do is start by just calling agencies and just arranging all these kinds of meetings. And you know, it turns into a beauty parade and you don't exactly know what decisions you're making.

So be clear what you want. And then the next stage is we typically tell a brand or help a brand understand What the criteria of evaluation should be, because normally it's a group decision. You know, it's very rare that we work with a CMO or a marketer who says, I'm just going to choose an agency. Normally there's lots of people involved. There's brand managers involved. There's agency relationships.

Sometimes legal procurement is that they can, you know, maybe a lot of businesses that we work with a divisional businesses, they're multinational multidivisional businesses. And you have stakeholders, complex stakeholder sets, but even in a small brand, you've probably got a small marketing team and that you want people's opinion. So it's fair to the agencies participating in that, that you share with them how you're going to make decisions.

It's really important for them to know how decisions are going to be made and who's going to be making decisions. And you need to know, right, what are we actually looking for? Agencies are really good at seducing marketers. They're really good at that. Like they're really good at getting marketers to fall in love with them. Agencies have wonderful people. In them that you want to work with. And we typically, we often have, you know, market to go. We like, we like all these agencies.

We love all these people. Can't we just hire all of them? Um, we can't, and you can't fall in love with the individuals. You've got to really think that, you know, there are capability questions. Can the agency do what we want? Okay. Cause we've made a list of things that we want. Does this agency actually do those things? Cause not all agencies do everything. Secondly, is there an alignment of culture and values? Okay. Is this our kind of company? Those things are really important.

Do we feel these are our kind of people? Okay. Do they work with brands that we like or that we could recognize that are like ours? That cultural fit and alignment of values is something that we spend a lot of time thinking about in advance, like which agencies to put on a long list. Um, and it's something that we encourage marketers to really, uh, look out for. Okay. And actually score on those things.

And the third part is commercial terms, because you can fall in love with an agency and then you think, Oh, I can't afford them. Um, and you need to be really clear what it's going to cost, both in terms of the staffing and the fee, but also other, there's lots of other resources, there's increasingly technology and tools that agencies will have. Um, and when it comes to media agencies, of course, like how and what they buy in terms of media, how they, how good they are at negotiating.

Um, so those are the three areas, the capabilities, cultural fit and commercial terms that we encourage marketers to think about. And if you've got a scorecard or some way of evaluating agencies around those kind of areas, then, you know, go see three, four, five agencies. And then make a decision, fall in love.

You get a really good, beautiful ad, but for the distribution of that ad, if you brief the agency in the correct way, then you get better results. That's what I've experienced for 20 years right now.

Because when you run a pitch, you want agencies to really want to be there and to really want to win. Um, so half the job at the beginning is to get the marketer to commit to, yeah, right. A really good brief, be open and transparent. These are partners you're going to work closely with for the next three, five, 10 years. You're going to entrust them with millions of your brand dollars.

Okay. Take some time to do it really, really well and present yourself in the best possible way, because the best way of getting the best talent, the best ideas, the best commercial terms, like the best agency showing up and being really competitive is that they want to work with you. And they're going to want to work with you if you present a realistic idea of what it's actually like and what your objectives are. And we encourage marketers to be really honest.

We say like, what are the worst things? What are you really bad at? You know, how bad could it be?

You know, agencies don't just have to work with big budgets, but also there's There's a change in the industry, which kind of makes that less important is that historically, and you made a reference to this earlier, it's like, you know, big budgets can get big agencies and they have a lot of money so they can negotiate better discounts and all of these kinds of things. They can utilize the resources of agencies better if you have more money, but that's not really true anymore or less true.

Because as of today. In a market like the U. S., about 50 percent of media budgets across all brands is not bought through a negotiation. It's not purchased from a vendor from a discount on rate card in the way that media used to be bought. But you'd go and you'd try and buy it a spot on a TV channel, or you'd buy a page in a newspaper, or you'd buy a banner on a website. There'd be a rate card of costs, and then you'd buy it. Maybe use your agencies, trying to negotiate those costs down.

Now about 50%, this is a big tipping point now is that half of our media budgets are now being traded through auctions. And that's a whole different dynamic of the way to buy and sell media. So if you think about how an auction works differently, an auction doesn't know how much money we have. And the example I'll give you, which I use often with marketers is like, you know, think of eBay. Everybody knows eBay. You can kind of go onto eBay and you can like bid for things that you want to buy.

Let's say you and I are both on eBay and we want to buy a new bicycle. Okay. And that bicycle is 50. You may be a billionaire. And I may literally just have 50 in my pocket, but if I want that bicycle more, I see more value in it than you, I will win that auction just because you can pay more doesn't mean that you will pay more. So an auction creates this perfect supply and demand marketplace that doesn't respect scale at all. So it means that actually smaller brands can be.

Way more competitive now because the whole media is becoming completely democratized. You can essentially, you can go and buy almost anything as a small brand. You just have to decide what to buy. And that is an intelligence that the brands increasingly have inside because they start to know they buy what they want. What works and what doesn't work so they can want to buy more of the stuff that works and less of the stuff that doesn't work.

It's a continual optimization exercise that we do for a lot of brands, just pointing them to things that work and optimize against those. It doesn't really matter how big you are as a brand. And over time, less and less media is going to be transacted in these large scale based negotiations, and more of it is going to be auction based. So the smarter brands will win. Those with the best data, those able to move quicker.

Um, again, another friend of mine, Shalindar's, uh, Marketer's Guide to Digital Advertising. Transparency metrics of money. Highly recommend. These are quite dense reads, but they're worth it. And then sorry, a little bit lighter, which is quite cool. I think is, um, Roger's book, quantum marketing. You're probably more familiar with that one.

Um, they've got these weird, wacky flavors and don't know why you ruined coffee by putting kind of, you know, strange, strange kind of maple bacon flavored pumpkin creamers in your coffee. So I was saying, I was saying to my kids, um, We're going to Paris next year. We're taking them to France. I'm like, let's just get to Paris and just let, let's have a coffee in Paris or let, you know, when we get to Italy. So, I mean, I think the best place to drink a coffee is probably yeah.

In a square at Italy is probably like one of my favorite place. I mean, it's good, but it feels good.