Thailand’s rude awakening into a broken digital advertising industry

Brands in Thailand are increasingly asking for more transparency from their agencies and partners. But as maturity reaches a tipping point, some serious problems with mark-ups, misplacements and an all-out mess of an ecosystem need to be addressed, writes Dominic Powers

There are times when I despair at how much further we need to go as an industry.

Recently a media agency in Thailand asked our managed services trading team to run a US$300,000 campaign. However, that amount had to include the service fee for not just the use of our technology, and our team’s time and brains for campaign execution, but also the agency’s 25 per cent commission as well.

Commission for what exactly? The client probably could have used that commission money to access a media management and buying platform directly and employ two competent traders for a year. In this scenario the agency offers no real strategic value and is merely playing the role of middleman.

Powers: “There is a tremendous wealth of opportunity for brands to play in Thailand’s digital market – and the need for accountability and transparency will only get more intense”

When clients don’t lean on their agencies for more information other than the results they want to see, mark-ups are hidden and disclosed only at the agency’s discretion. Transparency boils down to whether the client requires it, and is not considered a standard minimum protocol. And there are still far too many clients that are only concerned about results and not how wisely their money is spent.

The digital advertising ecosystem is broken and for far too long it has been leveraged in favour of the intermediaries, at the expense of the brands and the publishers. As a dollar from a brand enters the lumascape, it is sliced and diced to such an extent that only about 30-40 cents on the dollar reaches the publishers.

As buys are executed across multiple platforms, with multiple logins and across multiple screens, agencies take their service fees and DSPs charge their minimum spends. We are an industry that is awash with some questionable practices and short-term intermediary profit-maximisation.

Data. Insights. Intelligence. Very little of it is being used to generate any true value – the type of value underpinned by dollars and cents – and this is not despite of all the technology that marketers and their agencies have access to but because of it. Data and technology ought to be a means to an end, and not the end itself.

Marketers and agencies confuse affinity with intent; and their supposedly smart programmatic interactions are doing little but placing the wrong ads, at the wrong times and in the wrong place. Trust me on that one.

Yet these campaigns cost millions in media spend, and millions more in services from trading desks. Behind the smoke and mirrors, is a reality where solutions are cobbled together across various buying platforms, using multiple logins and manually generated reports that are no more real-time and insight-driven than that decision to buy a print ad or a TVC placement used to be.

Total ad spend in Thailand is estimated to hit US$2.27 billion this year, with digital ad spend accounting for 21.9 per cent. By 2021, it is expected to account for 28.7 per cent.

Leading the digital pack in Thailand are the skincare, beverages, dairy products, communications, automotive and banking, with the former alone spending US$30.9m in 2017.

There is a tremendous wealth of opportunity for brands to play in Thailand’s digital market, and as the stakes get bigger, the need for accountability and transparency will only get more intense.

Change is already taking place and the tipping point seems to be just around the corner thanks to awareness of issues from other markets and consistent media coverage on ad fraud and brand safety. Meanwhile, domestic marketers are finally starting to ask for greater transparency from their agencies in terms of how money is spent and where fees are going.

The democratisation of media and consumer engagement is upon us now. Brands have had enough of the old ways of programmatic, and are rightly calling for change, as scorecards show an industry failing to deliver. The silos need to be broken and the playing field levelled again.

This is now the time for brands in Thailand, and indeed the world over, to take back control.

Dominic Powers is the chief executive officer of programmatic company CtrlShift


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