Bill Duggan on The Advertising Industry Today and Key Lessons for Both CMOs and Agencies
The long-time ANA leader reflects on his years in the industry, shares advice for CMOs and agencies, and discusses key findings from the ANA's groundbreaking study on waste and fraud in programmatic marketing
Bill Duggan is a Group Executive Vice President at the Association of National Advertisers. He is responsible for overseeing many of the ANA’s popular conferences and events. He also leads the organization’s brand/media committees and has helped develop the ANA initiatives on media transparency, production transparency, the programmatic supply chain, creative briefing, and digital advertising fraud.
Bill spearheaded the alarming report: The ANA Programmatic Media Supply Chain Transparency Study published initially in June with a follow-up complete report in December, that found an unprecedented amount of waste in programmatic advertising. The study’s analysis of quantitative data alongside qualitative interviews with marketers revealed that a whopping $22 billion dollars of the $88 billion spent on open web programmatic is wasteful and/or unproductive. Put another way, one in every four dollars spent on programmatic is wasted.
The Continuum recently sat down with Bill to discuss this disturbing report and ask him about his agency experience and twenty-plus years at the ANA.
Before we talk about the report, can you tell us about your background in advertising? Did you always know you wanted to go into this industry?
I was a finance and marketing major in college, but I didn’t know what I wanted to do. I sent out about 100 cover letters to a wide variety of companies when I graduated. That might not sound like a lot, but this was in the days of typewriters when you had to do one at a time. I think my first interview was with Bankers Trust, then I interviewed at Macy’s and Gimbles, which were both big department stores at the time, and I met with a bunch of ad agencies.
I think I had 20 interviews and got two job offers, which is not a bad batting average, actually. One of the offers was from Kmart, working as a supervisor at a distribution center in New Jersey, and the other was from Dancer Fitzgerald Sample, which was a mega-agency back in its day. I still remember the HR director who hired me. Her name was Celine Schneider. She was maybe five feet tall with a German accent. She saw something in me for which I am forever grateful. She offered me an entry-level job in media, making $10,000, which, of course, was more money than I had ever made in my life.
I was at DFS for almost four years in media. During that time, I started to work on my MBA at NYU. I liked media, but I wanted a fuller picture of strategy, creative, and research. It’s a fairly common move for people to start at an agency in media and then move into sales, account work, or product management. I chose account work and got a job at Grey Advertising as an assistant account executive. I was there for 16 years, and it was a great ride. I worked on accounts like Aquafresh toothpaste, Canon, and General Foods.
Did you have a favorite client or ad campaign?
I really enjoyed working with Canon. This was back when people had to have cameras that weren’t also phones. It was interesting working with a Japanese client because the culture was really different. I learned a lot, and I think we did really iconic work. I loved working on the Andre Agassi “Image is Everything” campaign for the Canon Rebel camera. I have two Effie awards, and one of them is for that campaign. I also have some great stories about that campaign.
Andre was dating Brooke Shields, and they were one of the hot celebrity couples at the time. So, of course, the television kept flashing on Brooke in the stands during the U.S. Open. When he won the championship, they caught Brooke taking pictures of him on the court with her own camera. It was adorable, but she used a Minolta camera in the middle of Andre’s huge push for Canon. All the media outlets noticed, and the client went nuts.
The other funny thing that Agassi fans will appreciate is his hair. I don’t know who remembers this, but when he first rose to fame as a young kid, everyone made a big deal about his long hair. At one point, he had it buzzed on the sides and really long on top and in the back. Even after we could all see that he was starting to bald, he kept his hair long. So, we shot all these Canon commercials with him, thinking we had campaign material for a couple of years. A few months later, he debuts his new shiny, shaved head. Everything we shot was now clearly outdated. As you can imagine, the client was not happy.
“There is lots of money spent on programmatic advertising, but figuring out where to advertise and how much to spend is complex and murky.”
You left Grey after 16 years and went to the ANA; what made you make that change?
Really, it was Bob Liodice who is now our CEO. He had been a client of mine when he was at the old Kraft General Foods, and we had a great relationship. My original game plan was to leave Grey and go to the client side in a marketing services role, so Bob made some introductions for me. But he also made me aware of a role at ANA that he thought would be a good fit. It was an SVP position running their committees and conferences. I was excited about it because they had committees on things like TV advertising, multicultural marketing, agency relations, and production. These were all things I’d done in some way or another during my agency career.
I got the job and started in May 2000, meaning I’ve been here for almost 24 years.
How has the organization changed over those years?
When I joined, there were 28 people on staff, and we had 180 members. Now we have a staff of almost 200 and about 1,500 members. I feel blessed to have been part of the team responsible for that growth. Certainly, a huge credit is due to Bob, who has now been CEO for 22 years.
The other really big change is in the perception of the organization in the industry. When I joined, we weren’t acknowledged as the leading trade association in the ad industry. You had the 4As and, to some extent, the IAB. ANA represents the client-side marketer, which is a really important voice, and over the years, our work has elevated our perception and ability to impact the industry.
One thing that I really love about being here is the opportunity to impact the industry as a whole. When I was at Grey, I could impact my client, and maybe I could have some impact on the company, but I definitely couldn’t impact the whole industry. Now I can do that.
Well, you’ve certainly have had an impact. In 2016, you did a report that found significant transparency issues in media, and now we have this latest report that really shook advertisers. Can you tell us about what you’ve found over the years?
A few years back, there was this sad allegation that agencies were taking rebates from media companies. A media company would say, “If you spend a million dollars with me, I’ll give you back $100,000.” We investigated, and it turned out to be true. Remember, that’s not the agency’s million dollars; it’s money that their clients are spending. We brought this to light and then figured out that the problem was really with the contracts that brands had with their agencies. Over the next few years, we worked to educate our client-side members on what makes a good contract. That’s work that I’m really proud of. Our outside legal counsel, Reed Smith, also deserves a lot of credit there.
I’m proud of our new report too. We actually published two parts of a report on programmatic advertising last year. When we say programmatic advertising, we’re talking about automated digital advertising enhanced by data. There is lots of money spent on programmatic advertising, but figuring out where to advertise and how much to spend is complex and murky. One of my favorite ANA lines is, “Where there's a mystery, there’s the margin.” There’s a ton of mystery in programmatic advertising, so there’s a ton of margin. Unfortunately, advertisers are getting exploited.
We studied 21 advertisers who spent $5 million dollars each and found that only 36 cents of every dollar they spent effectively reached the consumer. One of the most shocking things we found was that the average campaign ran on 44,000 websites. Think about that. On your average day, how many websites do you go on? Even in your average week? Maybe 20 tops. The theory behind advertising on smaller websites may be sound. The same person who checks the Wall Street Journal in the morning may look at their local news site in the afternoon, and those sites are certainly less expensive. Programmatic began with a focus on following the audience and less emphasis on the environment of the ad. But it's ridiculous to run on 44,000 websites. It also brings up a lot of brand safety issues because you have no idea what kind of information and other advertising will be running alongside your ads.
There are a lot of middlemen between the advertisers and the final product; there's the media agency, perhaps an agency trading desk, and many technology middlemen like DSPs and SSPs. While they deserve to make money for their work, some of them are clearly taking advantage of advertisers. Our thesis is that advertisers need to wake up and pay more attention to where their money is going.
“I think clients want integration. They don’t want to be dealing with multiple partners and have it be their responsibility to integrate all of the various parts. The more an agency can offer under one roof, the better.”
What other issues is the ANA focusing on this year?
We do a survey at the end of every year to identify the marketing word of the year. I think it’s no surprise that last year’s word was AI. Our members have a lot of concerns about what AI will mean for our industry, how to use it responsibly, and what the legal ramifications will be. I think AI is going to be an evergreen issue moving forward.
Measurement continues to be a big issue. There's a team here at ANA that has been working on cross-platform measurement. Take a typical consumer. She watches TV in the morning, goes to Facebook while she drinks her coffee at work, may go to LinkedIn in the middle of the day, and binges shows on a streaming service when she gets home. For our advertisers, the holy grail would be to follow her and know they’re reaching the same customer across multiple platforms.
Believe it or not, the creative brief is an issue our members think about. It’s probably the most fundamental document in our industry, and people still identify it as a pain point. We've asked both marketers and agencies to name things that enhance creativity and barriers to creativity, and the brief comes up on both lists. This makes sense. Having a good brief helps lead to better creative, but it can also be a barrier because having a crummy creative brief can lead to poor work. We’re trying to help members identify best practices for developing a creative brief.
We also have an active office in Washington, DC, and one of the things they are working on is the issue of ad taxes. Many years ago, Florida put a tax on advertising, which meant a brand’s media spend was taxed. The industry revolted because an ad tax would mean less money to spend on advertising, and that would have a trickle-down effect. Think about all the careers that are touched by advertising—everyone who works at a television network, a social media company, or a marketing department. Everyone who works directly in advertising, from a creative lead down to the craft service people on a commercial shoot. Ad taxes are a pretty evergreen issue as well because a lot of state governments could consider balancing their books on the backs of the advertising industry by implementing one. We think that’s a bad idea.
What advice would you give to agencies right now?
I would tell agencies to try to be their clients’ most valuable resource. I believe one of the worst things that ever happened to this industry was the unbundling of media and creative. I think that that led to the downfall of ad agencies. Agencies used to do it all and were the most important partners for many marketers. Then media unbundled, and agencies were only half as important. Then, digital broke off from traditional media, and clients were dealing with yet another agency. Fragmentation was not good for agencies in the long term.
I think clients want integration. They don't want to be dealing with multiple partners and have it be their responsibility to integrate all of the various parts. The more an agency can offer under one roof, the better.
On the flip side, what advice would you give to CMOs right now?
I think the industry has gotten too complicated for one person to do it all. CMOs work in a short-term business environment, and I’m not just talking about how much turnover there often is in the position. It always seems more important to meet your quarterly goals than to look ahead to things that are one or two years out, but companies really do need long-term brand building. I think once upon a time, the CMO would manage branding and media, but media today is just too complicated and fragmented for that to work.
My counsel to CMOs would be to hire people with expertise in media because that’s really not what they should be spending most of their time on. This, of course, brings us back to the programmatic study and the idea that brands need to pay more attention to how agencies spend their money.
© 2024 The Continuum
February 6, 2024
