Is recent P&G statement about adopting MRC standard leads into wrong direction or is it indeed a first step in the chain of events that could reshape global media landscape?

Recently there was a lot of buzz in social media regarding P&G Chief Brand Officer Marc Pritchard‘s speech with strong messages to digital media. Marketing Week’s columnist Mark Ritson devoted a separate article to that, calling it “P&G biggest marketing speech for 20 years”.  I’m a big fan of Mark (Ritson, not Pritchard) as I think that despite him being seemingly critical about digital, he understands the value of it much better than many other “digitally-enthusiastic” marketers. So naturally, I was curious to have a look at the details of why this could potentially be something groundbreaking for the industry.

First of all, why P&G is unhappy? Well, for one, these days to justify payments for on-line media advertisers in many cases have to rely on suppliers’ internal metrics. While it doesn’t sound awful, it actually is a big thing. There are fearsome three letters, which finance department frequently use to frighten marketers: SOX. This stands for Sarbanes–Oxley Act passed by US Senate and obligatory for all US companies. It was written after Enron scandal and while of course it doesn’t have a direct relation to digital, this act made an enormous change in internal controls and created numerous internal procedures to make sure all accounting practices in modern corporations are whiter than white.

On advertising side in P&G there is a huge, powerful procurement department responsible for negotiations with suppliers. A company needs to pass through seven rounds of hell to qualify and has to provide tons of paperwork then to justify every service delivered. Now in this sterile world of lab robes and white gloves there is company, calling itself, for example, Facebook, that charges you hundreds of millions and says something like “trust us, this is your cost per click, we measured it ourselves! “

With no third-party measurements, this definitely creates all kinds of opportunities for various companies involved in the complex chain of on-line advertising and social media. Add to this recent case with Facebook measurement problems. Not exactly transparent and certainly nothing good to report to shareholders.

Is it actually possible to follow Media Rating Council standards?

Clearly, there is a need for a third-party independent single digital viewability standard and P&G CMO announced that “P&G was adopting the Media Ratings Council (MRC) standard and would expect all its agencies and media suppliers to follow them before the end of the year”. Great news! Let’s have a look at the MRC website to understand their state-of-the-art remedy for digital transparency!

This is an actual screenshot of the MRC homepage. It looks like it was created just after the invention of the internet. At present among MRC accredited internet services there are 26 companies, including Google and Nielsen (but not Facebook) with all kinds of metrics, which though don’t seem to bring us any closer to one digital currency. Simply there is nothing consistent enough to adopt and follow just yet!

After all MRC is a government organization, their site is not supposed to be fancy. But somehow looking at the variety of certified metrics, one gets an impression that (a) there is already too much data and (b) the common digital standard could hardly come from the regulators’ side.

By the way, will this new rules from P&G mean that they will immediately cut back on their spending with Facebook? Well, not exactly. So great vision  from P&G, but going in these footsteps might as well take us in the opposite direction!

Why common standard is such good idea?

Arguably all technology to enable common digital currency is already available. There are several good reasons how common approach could benefit us all.

1. It’ll simplify things enormously for advertisers, which most likely will result in sharp increase in online spending
2. It Increases the transparency and hopefully helps to tackle the grey area of methbots and digital fraud
3. Gets the industry closer to planning your communication as one campaign across all channels

Common ratings would certainly be favored by P&G: they tend to buy advertising in bulk, focusing on cost and much less concerned with quality of the content.

Main contenders in developing a new common digital viewership standard

So where this unified approach could come from? There are perhaps two obvious sources. One – biggest media agencies, like MediaCom, Group M etc. together work out a common ground. They handle billions of global advertising dollars, have negotiation power and are full of smart people who could make this happen. Could they profit on that? Potentially yes, since this should enable them to claim that they can more efficiently spend total budget of an advertiser. Not a weak motivation if this leads to more global pitches!

Second obvious group of credible contenders is TNS, Nielsen and GFK with their well-established expertise in TV ratings measurements. All three companies are going there one way or the other. There is particularly a lot already in place from Nielsen side, with the Total Audience Measurement approach they started to roll out end of 2015. If it will eventually do what it claims, it’s beyond brilliant. However, like TV measurement, it’s based on a consumer panel and in case with highly segmented digital content it might be difficult to make this measurement truly representative. So I’d like to be wrong, but it might take a while before Facebook and Google own data are in line with this new third-party approach.

Who benefits and who’s paying the bill

This all sounds fantastic, so looks like there is no one who should oppose to common veiwability standard! Well it happens there is. In the current digital duopoly state of things with Facebook and Google accounting for more than a half of digital spend, precisely these two stand in the way! Common approach would eventually make them cut back on their margins and lift off some of their walls to become more transparent.

While P&G single-handed effort hardly could quickly move the needle, other big advertisers follow suit might change things dramatically. At present with abundance of data and excess of various metrics, we are not there yet.

For sure this is not the last strong statement from a big corporation on their use of digital advertising budgets. Exciting times for the industry and as far as I’m concerned it would be very entertaining to watch how creative the industry could get in making Google and Facebook share their profits!