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Now Is the Time for Brands to Clean Up Their Ad Supply Chain

This article was written for the ANA Industry Insights blog and originally published on the ANA website.

More than halfway through 2022, the world is still feeling the effects of global supply chain issues. These woes are impacting the production of everything from planes to cars to Halloween candy. Every time an industry is hit with supply chain slowdowns, there is a trickle-down effect in ad spend.

The struggles of the marketing supply chain, however, get little coverage and it’s actually not new to 2022. For global advertisers, up to half of the creative work produced never runs in any markets. Do you think the manufacturing industry would tolerate even 2 percent wasted production? It seems unlikely.

Yet in the ad world, both agencies and brands lack visibility into how things move from production and out into markets around the world. Incredibly, double digit waste is the norm. The advertising supply chain – creating, producing, adapting, running, and measuring what’s worked – is so separate and disparate that it barely deserves the name supply chain. Our world is split asunder.

This is happening at a time when every marketing dollar is under scrutiny, making ROI more important than ever for every CMO. To date, ROI measurement has focused largely on media spend, rather than the upstream components. The gulf between asset creation and media is why the supply chain remains so opaque, with too much work wasted. What better time than now to inspect the marketing and creative supply chain, to create a deeper, more actionable measure of ROI?

Minding the Gap
Way back, in what now feels like the last millennium, a global brand would hire one agency to run everything, from creative to production to media planning and buying. It was expensive, and imperfect, but it was easy to connect the dots.

Over the last two decades, the marketing universe has expanded in line with the laws of the actual universe, where the pieces seem to be moving further and further apart. It’s akin to Hubble’s Law, which says that the further apart the planets are, the faster they move away from each other. The further reaches of today’s digital world – DCO, programmatic, and cutting-edge technology, to name a few – feel as if they are moving away from each other at faster and faster speeds.

With the bifurcation of creative and media, along with the rise of specialist agencies that handle their own portions of the workflow, the disconnects have proliferated across the marketing supply chain. So, it has become more difficult to connect the dots from planning to production to results as the marketing ecosystem has expanded.

Nobody is going to put the genie back in the bottle when it comes to media planning and buying. The romantics may miss the old days, but the reality is that those days are over. Honestly though, we don’t need to go back. All the pieces of the advertising supply chain can remain, we just need to close the gaps.

Solving the Supply Chain with Data
When brands measure ROI now, they need more than just media performance evaluation. Brands need to know what they produced (in terms of creative), what was adapted for different markets and audiences, and what impact that creative delivered.

None of this is to say that brands don’t track what they spend on production. Clearly, they do. But at a broad level, they are looking at two large buckets – production and media spend – not diving into the details. For most brands, there is no connection, and to return to Hubble’s Law, the two categories feel like they are speeding away from each other faster than ever.

The devil is truly in the details. If a brand creates 100 campaigns in a given year, there will be wild deviations in the ROI measurements for each individual campaign. This depends on what’s created and produced, what runs and what doesn’t, as well as media costs. No brand or agency can determine the true ROI without zooming in on the parts in great detail.

That’s where the real magic comes in. Break things down on the campaign level, and the insights become actionable. Go one step further, and look at things from the asset level, and you can measure how far the creative travels. If something isn’t working in the supply chain, it’s time to fix it.

That’s the thing about ROI – it’s not simply a grade at the end of a test. It’s an actionable measure, and CMOs need to dive deeply into their ROI analysis to assess their costs and adjust their marketing supply chain as needed.

The issue, of course, is that for all the industry talk about the “real-time” flow of campaign data, production data moves slower. For one thing, production happens long in advance of a campaign starting. The initial pre-production investment in creative may have happened a full year in advance of an ad reaching the first consumer.

Time may be the advertiser’s greatest hurdle, but the truest sense of ROI requires brands and their agencies to bridge the disconnects. And there are a lot of disconnects that need addressing in the modern advertising world. ROI focused brands need to line up these investments – from production to talent payments/rights to media – so that they have visibility and can pull the levers to concentrate on what works.