As I’m sure everyone reading this will know, the Christmas sales period represents not only one of the busiest periods of the year for online advertising but also one of the last pushes before budgets are reviewed for the new year.
The last two years have put more pressure on ad budgets than most working in the industry are likely to remember and, without exception, everyone’s being more careful about their marketing spend. However, is there a danger that thriftiness in buying ad space could be limiting the scope of brands’ campaigns?
In short, do preferred partner, commercial agreements between ad agencies and publishers threaten media neutrality?
A simple way in which agencies can make their money go further is by entering into commercial partnerships with preferred publishing partners, generally big websites or networks who are over a certain profit threshold, that can offer discounted ad space in exchange for yearly spend contracts.
This is not at all an uncommon practice, and all well and good you might think, but there is a concern, particularly at this time of year and with the current squeeze, that pressure to reach the annual target spend may influence some of the bigger advertising agencies to push their clients towards their preferred partners rather than suggesting more appropriate, targeted outlets.
As preferred partners tend to be larger websites, niche specialist sites lose out as agencies are restricted as to how much they can invest in them.
The problem is that, if un-checked, the practice of preferred partner status could mean that big publishers can essentially create a monopoly, influencing the media neutrality of some, bigger advertising agencies.
This could in turn be to the detriment of a brand’s campaign. Research has continually demonstrated that targeted campaigns on relevant, niche websites typically have a higher response rate than advertising on the larger, more generic websites.
Specialist sites tend to have a loyal following of consumers who are more likely to engage with adverts on the site, which they see as having the endorsement of their trusted website.
In my view, as more campaigns are now being paid for based on a results rather than through a pay-per-click model, the practice of preferred partner networks will ultimately become self-defeating and will have to evolve to meet the needs to the clients.
The industry needs to ensure, as a self-regulating body, that we don’t confuse better rates with better advertising.