“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Nicole Ferry, partner and executive director of strategy at Sullivan.
Earlier this summer, the SEC approved Investors Exchange (IEX) to become a public stock exchange, putting the pro-transparency startup squarely alongside incumbent powerhouses like NASDAQ and the New York Stock Exchange.
The financial services industry has long been regarded with skepticism and distrust, so a significant win like this for a pro-transparency player is important – and one from which advertising should take lessons.
That’s because the ad industry – particularly ad tech – has a trust problem. Not unlike financial services trading desks and brokers, advertising has created a dark pool of its own for the brands that rely on it. Bots, ever-increasing mobile usage and ad-skip capabilities have raised questions about how many people are viewing and being influenced by an advertisement. With the latest in blocker-for-ad-blockers technologies, the real meaning of views and impressions is harder to define.
While financial technology’s latest developments don’t offer a road map for solving advertising’s biggest challenges, the way that fin tech players have communicated to their customers does offer guidance for building trust into an industry that’s come under fire.
State Your Intentions
It’s not surprising that any industry that’s known for its historic love of martini lunches and free client swag may have a hard time proving its loyalty to values and principles. However, the first step for ad tech players trying to build trust with marketers that are doubting advertising’s transparency is to be clear about what they’re trying to do. What do they stand for? What values guide their business?
For the robo-adviser Motif, for example, this means explaining its product in terms of its core principle: Investments should tie to personal beliefs. Rather than describing how its service works at a technical level, Motif stands on its philosophy first.
Dare To Define Yourself
With so many providers trying to use the same jargon to explain themselves, it’s hard for brands to understand what each ad tech company is uniquely offering and what it doesn’t. While there is value in asserting “proprietary technology,” the language being used to describe each company is largely too loose for marketers to really understand what’s being offered. This is made even more challenging with increasing consolidation – more companies are offering more services, but the differences between each one isn’t quite clear enough.
Ad tech companies should follow fin tech’s lead and take a risk on giving more information upfront. IEX includes a FAQ on its website explaining what it is and what it is not. TransferWise posts its exchange rates online, clearly stating the differences between its offering and what a traditional bank would give consumers.
Laying your cards on the table can leave companies feeling exposed. It may also box in a technology company but if it is confident in the value it is providing, the transparency will only win over more customers. And the more loyal the customers, the more likely they’ll support companies as they expand beyond their current “box.”
Acknowledge The Challenges
For many brand marketers, pressure to prove the effectiveness of high ad spend is often transferred onto the agencies that are overseeing the budget or the ad tech companies that are responsible for executing the plan. Ideally there would be a way to prove ROI and undeniably link revenue growth to advertising spend, but it’s still impossible. It’s important for companies to be humble enough to admit what they cannot control and be honest enough to explain the plan if worse comes to worst.
Some in the industry are beginning to do this. Earlier this year, for instance, DataXu and TubeMogul made headlines when they announced a plan to refund advertiser money if ad fraud were to occur on their watch. By acknowledging the pervasiveness of ad fraud, the chance that it could happen and publicly offering a plan to fix a potential situation, platforms like these show customers that they can be trusted.
In both financial services and advertising, the stakes run high. There’s a significant investment being made from all parties, and when a technology comes into play, people become wary of what’s going on behind the scenes.
Fin tech has made tremendous leaps forward in earning trust, evidenced by fin tech darlings like Venmo, which has processed $3.2 billion in payments, or Betterment. which raised $5 billion in investments, but ad tech has further to go.
Until views, impressions and ROI become foolproof metrics rather than questionable concepts, it’s important for ad tech companies to communicate honestly, openly and frequently to build the trust that marketers are seeking.