Philips is muscling its own agencies out of the way to work directly with Google, Facebook and Amazon.
Not only are Philips’ campaigns now developed directly in partnership with the triopoly, the advertiser is also plugging its own measurement and optimization technologies into those platforms to source its own information on how well they each perform.
“We’re working more directly with Google, Facebook and Amazon to the extent that the need for middlemen at media agencies between us and those platforms is becoming less and less,” said Philips’ global head of marketing, Tomasz Lisewski. “The support we’re getting from the platforms is good, but judging the effectiveness of them needs to come from us.”
Despite the growing backlash against the tech giants, Google, Facebook and Amazon have made it too easy for advertisers to advertise across the internet via their sprawling ad networks. Buying, bidding and reporting online campaigns are being automated as a result, which, Lisewski believed, left the business reliant on those platforms to make accurate decisions. A marketer at the brand is still important even in a fully automated world, said Lisewski.
A large chunk of that investment is going on what Lisewski called “real-time content optimization,” which essentially is technology that allows Philips’ marketers to optimize content locally depending on how popular certain content gets. Philips’ media budget isn’t as large as other global advertisers and so part of the rationale behind the technology is to reach large swathes of people without having to spend big for it. If the most popular branded posts on Facebook, for example, can be flagged shortly after they’ve been shared then Philips can make a call on which ones it should boost with paid support.
Philips has also come up with a key way to translate business metrics into success across Google, Facebook and Amazon. Similar to Duracell, Philips has developed a global digital scorecard of brand and performance metrics that can be applied globally to its campaigns across the triopoly based on data from the verification company it owns the contract to rather than the agency. Agencies, not advertisers, usually own the relationship with verification companies, though this is changing as more advertisers exert greater control over how their money is spent.
“The majority of the trioploy’s tech has been built around supply and demand, which is largely spend-and-delivery-based rather than performance-based,” said Oli Marlow-Thomas, founder of martech startup Ad-Lib Digital and former Google executive.
As close as Lisewski is to the triopoly, he said Philips can’t afford to spend more money on them based on how well they claim they work for advertisers. Adidas, Procter & Gamble and Duracell have had similar reservations in recent months and curbed spend as a result, while the biggest ad buyer in the world GroupM is actively working on offering its clients alternatives to the duopoly.
“We’re building the analytics resources internally to take advantage of each of the big platforms because the access to those systems is available to everyone, including our competitors,” said Lisewski. “The difference in performance won’t come from the platform itself but from the capability we have in-house.”
Philips’ proximity to the triopoly comes after the business overhauled the way it works with media agencies in 2017, which saw it — like many other advertisers — decide it wanted its marketers to do more of its marketing themselves. Campaign setup, optimization and reporting on Google, Facebook and Amazon becomes smarter and more automated every year, so the training and experience required to operate the tech has decreased heavily. For advertisers like Philips, working directly with Facebook and Google brings major cost-saving potential.
“It’s natural for companies with very limited true competition, such as Facebook and Google, to find alternative ways to optimize their bottom line,” said Ruben Schreurs, managing partner at digital media consulting firm Digital Decisions. “In their case, they are prioritizing the reduction of lost margins by working on their demand chain, and cutting out intermediaries like agencies is a commercially sensible way of doing this.”
Agencies still have a role to play in steering Philips’ media buys. The advertiser increasingly pays its agencies for their planning expertise and also relies on their scale to secure the best deals for its traditional, regional media such as TV and radio.
Image courtesy of Philips.