Elie Khouri: The in­dus­try de­serves bet­ter than this

ArabAd - - CONTENTS - - I.A.

Ip­sos’ ad­ver­tis­ing ex­pen­di­ture fig­ures are in­ac­cu­rate and mis­lead­ing, says Elie Khouri. Only through an over­haul of its method­ol­ogy and greater in­dus­try col­lab­o­ra­tion can it pro­duce a truer pic­ture of the in­dus­try

Ac­cord­ing to Is­pos, to­tal ad­ver­tis­ing spend across tra­di­tional me­dia in all re­gional mar­kets last year stood at $20.3 bil­lion. A fig­ure, it said, that rep­re­sented a seven per cent drop on 2016. You could al­most feel the dis­be­lief in the air when those fig­ures were pub­lished.

How had Ip­sos, a mar­ket re­search com­pany with the ad­mit­tedly tough task of mea­sur­ing ad­spend, ar­rived at such im­plau­si­ble fig­ures? It’s a ques­tion that Elie Khouri, chief ex­ec­u­tive of Om­ni­com Me­dia Group, was one of the first to ask.

“Most mar­ket ob­servers as­sess the mar­ket to be worth around $4 bil­lion, all in, in­clud­ing dig­i­tal in­vest­ments,” says Khouri, re­fer­ring to Ip­sos’ fig­ure of $20.3 bil­lion. “The dis­crep­ancy be­tween those two num­bers clouds ev­ery anal­y­sis, con­ver­sa­tion or in­deed eval­u­a­tion, leav­ing ev­ery­one to come up with their own de­fla­tor to ar­rive at a net fig­ure. Some di­vide the gross by half, oth­ers go as far as cut­ting some brand­mon­i­tored in­vest­ments by 10. The re­sult is a plethora of num­bers and a con­cern­ing lack of con­sen­sus. This means we’re all left to our down de­vices to man­age these num­bers.”

Ac­cord­ing to Khouri, there are three lev­els of in­ac­cu­racy in the cur­rent re­port­ing of ad­ver­tis­ing in­vest­ments by

This re­gion de­serves a more re­li­able source of data to plan and re­port ad­ver­tis­ing ac­tiv­ity… This is one op­por­tu­nity for in­dus­try bod­ies like the IAA and IAB to show their worth.

Ip­sos: the vol­ume of ac­tiv­ity, its value and its source.

In terms of vol­ume, the mon­i­tored me­dia uni­verse is a frac­tion of the to­tal avail­able. Ar­guably, in some me­dia like TV, print and ra­dio, the cov­er­age is in the re­gion of 90 per cent. For other me­dia like out­door, cin­ema and, more wor­ry­ingly, dig­i­tal, it’s a lot patchier, de­pend­ing by coun­try. In a pro­gram­matic en­vi­ron­ment, track­ing ad­ver­tis­ing place­ments is a chal­lenge.

In terms of value, Ip­sos uses the only data it has ac­cess to and that’s rate card. Hence they pro­vide a gross value for the ad­ver­tis­ing ac­tiv­ity they’ve de­tected. The dis­crep­ancy be­tween rate card and ac­tual ne­go­ti­ated rates is large enough to cre­ate a sig­nif­i­cant gap, which, com­bined with the fact that some ad­ver­tis­ing ac­tiv­ity is not recorded, com­pounds the prob­lem.

Lastly, the source of the ac­tiv­ity – namely the at­tri­bu­tion by brand owner and agency – is of­ten in­ac­cu­rate and makes the read­ing of mar­ket po­si­tions and ac­tiv­ity more com­pli­cated than it ought to be.

“Ip­sos es­ti­mates dig­i­tal to be worth $800 mil­lion,” says Khouri. “On their to­tal of $20 bil­lion, this is only four per cent. At such lev­els we ap­pear as lag­gards, when in fact we stand at 30 to 40 per cent, much more in line with the rest of the world. This makes for un­nec­es­sary con­ver­sa­tions with our clients, who right­fully ques­tion the value of the data we use to track their com­pe­ti­tion and in­ject in our plan­ning. Though, over the years, we have de­vel­oped cop­ing mech­a­nisms to deal with the in­ac­cu­racy, it does com­pli­cate au­to­mated re­port­ing.

“And then there are the con­ver­sa­tions with our in­ter­na­tional coun­ter­parts. The Mid­dle East is com­pli­cated enough as it is, we don’t need to add un­re­li­able num­bers to size it up, its brands, or its evo­lu­tion. It only serves to paint the re­gion as an opaque mar­ket.”

The track­ing of ad­ver­tis­ing in­vest­ments in me­dia is an es­sen­tial com­po­nent of the mar­ket­ing ecosys­tem. How­ever, the cur­rent sys­tem of mea­sure­ment used by Ip­sos is not work­ing.

“Ip­sos’ job is to catch as much of the brand ac­tiv­ity as pos­si­ble and quan­tify it ad­e­quately,” says Khouri. “Like other sim­i­lar com­pa­nies around the world, they need to move to net, rather than gross (or rate card), val­ues. There are sev­eral ap­proaches to achieve this and they need to find the one that works here.”

One con­sis­tent prob­lem – both re­gion­ally and glob­ally – is the quan­tifi­ca­tion of dig­i­tal in­vest­ments, which presents a sig­nif­i­cant chal­lenge, par­tic­u­larly in a pro­gram­matic and bid­dable en­vi­ron­ment.

In the UK, the Internet Ad­ver­tis­ing Bureau (IAB) has mea­sured the size of the dig­i­tal ad­ver­tis­ing mar­ket in con­junc­tion with PWC since 1997. Me­dia own­ers sub­mit their dig­i­tal ad­ver­tis­ing rev­enue fig­ures con­fi­den­tially to PWC who then pro­duce ag­gre­gated data to show the size of the UK dig­i­tal ad­ver­tis­ing mar­ket. The Dig­i­tal Ad­spend Ad­vi­sory Board, which in­cludes the ma­jor agency groups, pro­vides es­ti­mated fig­ures for any ma­jor me­dia own­ers that do not sub­mit fig­ures di­rectly to the study.

“Our re­gion doesn’t have the great­est ex­pe­ri­ence of open­ing its books and sub­ject­ing its num­bers to third-party scru­tiny but this will be the way to go if we are to op­er­ate with con­fi­dence on the ba­sis of ac­cu­rate data,” believes Khouri. “What the IAB UK ex­pe­ri­ence shows, though, is that you can’t dis­so­ci­ate the in­dus­try from the re­port­ing, as­sess­ment and anal­y­sis of the data. Ip­sos should in­volve the agen­cies in a review of its data and re­ports.”

In all there a mul­ti­tude of is­sues to be dealt with: the quan­tifi­ca­tion of ad­ver­tis­ing in­vest­ments across all me­dia; the re­duc­tion of the gap be­tween rate cards and ne­go­ti­ated rates; and the need to review the clas­si­fi­ca­tion and al­lo­ca­tion of brands to pro­duc­ers and dis­trib­u­tors, as well as agen­cies.

“This re­gion de­serves a more re­li­able source of data to plan and re­port ad­ver­tis­ing ac­tiv­ity,” says Khouri. “Ip­sos, in its de­fense, has called on its busi­ness part­ners to take part in col­lab­o­ra­tive work to re­duce the gap be­tween re­al­ity and fic­tion. So far lit­tle has hap­pened but they must per­se­vere. With re­li­able and ac­cu­rate data, we have the power to stim­u­late growth in the mar­ket sim­ply by adding con­fi­dence and clar­ity about where ev­ery­one stands. This is one op­por­tu­nity for in­dus­try bod­ies like the IAA and IAB to show their worth.”

Ip­sos es­ti­mates dig­i­tal to be worth $800 mil­lion. On their to­tal of $20 bil­lion, this is only four per cent. At such lev­els we ap­pear as lag­gards, when in fact we stand at 30 to 40 per cent, much more in line with the rest of the world.

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