Is transparency still a concern for advertisers?

Agency trading desks remain an issue for many clients, but are their fears misplaced?

Advertisers value it, agencies all lay claim to it, while Sir Martin Sorrell admits to being “troubled” by it. One of the enduring big issues for an increasingly programmatic media landscape in 2014 is trading transparency.

As everything becomes digital, automated trading promises speed and efficiency in advertising at scale.

Yet the ongoing debate about the opacity of trading desks continues to cause concern for those who actually pay for the service. And it’s far from just a local problem.

A study by the World Federation of Advertisers found that 87 per cent of its members were unhappy with the level of transparency from trading desks; 54 per cent revealed they had been asked to sign separate agreements with their agencies limiting ( among other things) the right to audit performance.

The WFA’s research concluded: “The central concern is that agency trading desks offer a new way to charge more f or the same product, that the price that is paid for an impression can bear no relation to the price the media owner charged for it.”

Advertisers also fear that the ability of trading desks to provide a new profit centre makes them vulnerable to making choices that are determined by the agency’s business interests rather than its client’s marketing goals.

The situation has not notably improved in 2014 – the only major difference is that all parties are now at least more up to speed and aware of the issues.

Caspar Schlickum, the EMEA chief executive of WPP’s Xaxis, appeared to sum up the mood at the big networks last month when he defended his business by saying clients need to get smarter about this area and that no-one is forcing them to use trading desks.

The argument goes: if you are in the business of selling audiences to advertisers, for a price that clients have agreed to pay, why do agencies need to disclose all of the costs of their own investment in the transaction? Clients may not know all the costs in the chain, but they see the high performance they receive.

So, is this good business sense or does the lack of transparency continue to be a cause for concern?