Elie Khouri, CEO of Omnicom Media Group MENA, Questions Regional Adspend Figures Released by Ipsos
Posted on June 10, 2018 | By Iain Akerman

According to Ipsos, 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 brand-monitored 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 Ipsos: the volume of activity, its value and its source.

“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.”

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.”

“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.”

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.”—