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The conflict of interest facing ad networks

The conflict of interest facing ad networks Tom Hespos

If you buy media, you've sat in the meetings. An ad network representative will come to your office and cover several marketing programs they've brought to life for their clients. They are turnkey programs, complete with creative production, a network-wide media buy, trafficking and reporting/analysis. The program will be conceived of, brought to life, pitched and executed by a "sales planner" who works for the network, but whose last job was as an assistant media planner at an ad agency.

Notice how the network calls the companies that run with it "clients" rather than "advertisers." Perhaps that's an accurate description, considering the network really provides value-added marketing services to advertisers, which would to some degree justify calling them clients.

If you buy media, you've also been somewhat confused by emails from companies that pitch marketing services. You've been confused because you're not sure whether these companies are vendors who are selling media, or whether they're competitors looking to poach your clients. They describe their services in a way that's almost identical to how you describe your services to clients. The only major difference is that they also sell media.

The agency community has been somewhat OK with this. That one major difference has been enough to keep these agency/networks from landing exclusive relationships with major clients. After all, if they can't be free of that major conflict of interest, they can't make reliable recommendations for clients, can they? 

Every once in a while, you'll see an industry pundit write a column or rant on a panel about sellers masquerading as agencies. I'm certainly guilty of that, and I continue to think it's justified. There is an inherent conflict of interest wrapped up in the notion of having someone who sells media also buy media for an advertiser.

But this time around, I'm telling you that for an increasing number of clients, those conflicts of interest are going to matter less than getting the digital puzzle figured out.

The U.S. is facing an economic crisis that will take it into entirely new, uncharted territory. I don't want to get into the details. I'll just get off on a rant and make myself upset. But I think the impact will be significant on our business.

I'm thinking that growth for digital won't be the major concern. Most forecasts of marketing and advertising spending agree that digital will continue to grow in 2009.  The issue is that everything else, with a few minor exceptions, will be declining.

Folks, I think we've hit that critical point where many advertisers know for certain that their traditional media models won't continue to work as they have in the past. If there are lingering questions about digital -- and just about every advertiser has them -- they'll need to be addressed in short order. If brands want to have a prayer of hitting their 2009 goals, they'll need to figure out digital quickly.

And the reality of the situation is that there are only so many agencies and consulting firms that can figure it out for marketers. With ad networks lined up to provide marketing services to major advertisers, do we really think that a bunch of them won't overlook the conflict of interest in order to get advice that could preserve their jobs (and potentially, their 2009 bonuses)?

Over the past several years, the concept of agency/seller has been merely tolerated. I think we could see a scenario where it's actually validated, contrary to the expectations and predictions of many of the old-school media pundits.

Tom Hespos is the president of Underscore Marketing and blogs at Hespos.com.

Tom Hespos is President of New York agency Underscore Marketing. He is a frequent contributor to industry trade publications and has been writing a regular column about online marketing and advertising since March of 1998. His clients include Wyeth...

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