The P&G Mandates

Procter & Gamble is a fascinating company. It is regularly the single largest advertiser in the world - and thus is extremely important for our industry. As a company, it may have the most customers in the world (topping even Facebook). P&G is run by a a management team extremely focused on efficiency and ROI. To that end, over the past few years, it has focused on end-to-end optimization. This includes dropping over 100 brands from its portfolio and selling several other peripheral or limited-growth companies (e.g. Duracell, Vicks, etc) and focusing only on a simpler set of core value drivers.

P&G is powerful and competitive through a few levers: marketing, supply chain, distribution, and innovation. As distribution becomes increasingly consolidated through companies like Walmart, Amazon, and Tesco, etc - and as e-commerce make traditional distribution less relevant, smaller companies can compete more directly on price or innovative marketing. As a result, P&G needs to place extra emphasis on its other levers. Over the past few years, it embarked on a massive overhaul of its supply chain to move quicker, improve transparency in its operations, and integrate more deeply with suppliers where possible. This is with the aim of getting closer to the customer, becoming more competitive, and becoming more synchronized across the whole supply chain. It should come as no surprise then, that a company that spends over $8B / year on advertising would take the same approach to its marketing spend. 

At the IAB meeting in late January, Marc Pritchard, the CMO of P&G, disclosed numerous issues that they found in their own media supply chain. This included the agency acting as a "principal" by collecting interest on the float (money that P&G paid the agency, which then collected interest in that agency's bank account until it paid the publisher), as well as issues surrounding undisclosed rebates. Pritchard set forth four rules that would be required of any partner in their media supply chain - from agency all the way to the publisher. These are

- Agencies must sign fully transparent contracts
- Viewability will be measured by a single standard - the MRC standard of 50% on-screen for at least 1 second, and for video, 50% for at least 2 seconds (P&G's rival, Unilever, uses the GroupM standard of 100% in view for any period of time, and 100% in view for 1/2 the purchased video ad time for video). 
- Every entity that touches the digital media will need to be accredited with TAG (Trustworthy Accountability Group), to limit fraud to the greatest degree possible. 
- No publisher self-reporting without external verification (this is particularly acute for Facebook and Google). 

Agency transparency is the natural outcome of the ANA Report on Media Transparency, which revealed a wide variety of secret fees that media agencies were taking (see here for more: The ANA Report on Media Transparency). Large media buyers want their agencies to make money, but in a transparent and straightforward way that aligns the agency's interests with their own success. To this end, having a transparent contract that is mutually beneficial is a good outcome.  

A single viewability standard, if this actually takes hold in the industry, will be invaluable. It is untenable that a viewable ad doesn't actually mean the same thing - how can you optimize to different and sometimes incompatible viewability standards? Publishers want to sell viewable ads, but it can be hard to comply with proprietary metrics. This creates pricing irregularities and material discrepancies. The actual decision about which metric used is less important than the decision to simply standardize which, because it is P&G, will mean that every player in the ecosystem will support their choice. That said, MRC is a much more publisher-friendly framework than the GroupM model. TripleLift has an ongoing commitment to improving viewability across the platform, including the Impression and Exchange Quality initiative, and the High Viewability Required project that's part of this initiative. 

TAG certification is a standard that a company meets certain requirements about not tolerating fraud. This generally means that the company contractually agrees to certain standards (or, in the more intense version, invites an independent auditor to check). This includes having a TAG compliance officer, employing filtering against certain domains and IPs, and implementing the payment ID protocol. TripleLift is in the process of being certified, and naturally we have no interest in tolerating fraud on the platform.

The last piece is self explanatory - P&G is holding large platforms accountable - to no longer be able to grade their own homework. This was tolerated early on because of the platform's market power and because they were innovative and exciting. But P&G is now using their own market power to reverse this trend.

These mandates are all good for TripleLift. We are creating a high quality, effective, independently measurable, fraud-free market place. While there are certain technical hurdles to meet the particular standards that P&G has chosen, they are all aligned with our mission and good outcomes. Having the industry meet on a specified set of standards will ultimately improve interoperability and help to root out the bad actors that have undermined the ad tech landscape.