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All you need to know about ad blockers, the death of digital ads and the end of clickbait sites.

As part of a series on the Future of Advertising, Chris Arnold has gone through over 100 articles, blogs, reports, comments and research on ad blockers – now used by over 198 million people and growing over 41% YoY – to bring you a definitive summation of the crisis that is hitting digital advertising like a tidal wave and what it means for brands, publishers and agencies.



“Digital advertising is dead. Long live digital advertising,” are the parting words of a speaker at a digital conference, as he leaves the stage to a round of applause, but it may actually be too late. He may also have used the phrase, “Online publishing is dead, long live online publishing.”

It took Apple to announce that it had an ad blocker or ‘content blocker’, in its new iOS9 update on the iPhone, to take digital’s biggest crisis to a national level of awareness. Now everyone knows about ad blockers, which means its adoption could soon rise to 85%, meaning it could wipe out the majority of digital ads and a lot of websites.

Also launched this year was an ad block browser on Android. Both Android and Apple have created an easy way for consumers to block ads on billions of mobile devices, which was the next great hope for digital ad revenue.

PageFair (a company that monitors ad blocking) reports that 22.7% of web surfers are currently blocking ads and the use of ad blocking is growing at a rate of 41% per year (some claim over 80%), but this could dramatically escalate with the publicity Apple has given it. According to Google Trends, searches for the term “adblock” have doubled in the past year.

One of the most revealing insights into the scale of what is happening comes from the Ad Blocking Report (created by the IAB and YouGov).

  • 18% of digital users in the UK currently use ad-blocking software, which estimates to be 12 million users.
  • 16% in the US, which grew 48% during the past year, increasing to 45 million monthly active users.
  • Europe grew by 35%, increasing to 77 million.

That’s already a lot of people not seeing the ads.

PageFair estimates that ad blocking will cost publishers worldwide around $22bn in lost ad revenue in 2015, and much more in 2016, UBS Securities puts the damage at $1 billion for mobile devices alone.

It’s estimated that 41% of 18-to-29 year olds use ad blockers (in colleges it’s much higher) and now it’s reached tip-over, adoption is growing faster among groups like Millennials.

Ad blocking is more prevalent among men surveyed (23%) than women (13%) and the propensity to block ads decreases with age – from 35% of 18-24 year olds to 13% of people 55+. (IAB research.) But all that can change overnight, literally.

Among those currently using ad blocking software:

  • 71% are using it on laptops
  • 47% on desktop PCs
  • 23% on mobiles
  • 19% on tablets

Ad blockers are now the top downloads on iTunes. Peace, developed by Marco Arment, former Tumblr developer and Instapaper creator, shot to number one on the iPhone app store before he had a crisis of conscience and withdraw it just two days later.

However apps like Crystal and Adblock Fast, 1Blocker, Shine, BlockBear, Refine, Purify and Adamant (to name but a few) have no regrets. Adblock Fast has only been out for about a month on Chrome, Opera and iOS 9 and already has over 75,000 users.

More than one third of Greek, Polish and German internet users run ad blockers, and it’s estimated that the loss to German publishers is over €800 million a year (according to ad viewability measurement company Meetrics).

One-fourth of the surveyed publishers and marketers said they had experienced a loss in revenue potential, or revenue of 10-20% caused by ad blocking. The publisher of the AWL said that up to 85% of it’s revenue is vulnerable to ad blockers.

Publishers are concerned that with less money coming through advertising they won’t be able to fund sites or even invest in improving them. But critics suggest publishers need to rethink their economic models.


A typical example of pop-ups getting in the way. No matter how hard we tried we couldn’t remove them. Would anyone do business with a pushy salesman who annoys them? No! Classic example of what Americans call ‘rude marketing.’


At first this may seem hype but in fact it is without doubt true. The online publishing industry, sales house and the media industry are in crisis, but it is one they have created. They have literally killed the goose that laid the golden egg.

The “abuse of the consumer at the hands of advertisers” is not an unfair comment from a blogger, and now the consumer is able to fight back.

As one commentator, reacting to an article wrote, “advertisers let loose on the web is like a bunch of paedophiles let loose in a children’s playground, they just can’t help themselves.” Strong words but it reflects how strongly people feel.

It’s now almost certain that ad blockers will kill off the digital ad industry model as we know it, just like TPS (Telephone Preference Service) killed off cold calling. This crisis will certainly change online publishing forever, forcing a new economic model, something we have seen in both retail and the music, film and TV industries. The lesson here is to stop defending, accept the consumer has the power of veto and start innovating

“Solution strategies such as increasing the relevancy of advertising significantly could slow down the proliferation of ad blocking; however, they cannot stop it. “ (BVDW report on ad blocking.)

Digital ads won’t completely die, but they do need to evolve and we are talking more revolution than just evolution

“90% of experts believe that the impact on the German advertising market through the use of mobile ad blockers will force change, ranging from significantly to very significantly. 85% of the experts believe that mobile ad blockers will prevail.” (BVDW report on ad blocking.)

It’s ironic that an industry that called traditional TV advertising a dinosaur is now one itself. But then TV called radio one too when it first launched. What goes around comes around.

Can we trust online anymore?

This just adds to recent concerns by brands that people aren’t seeing their ads as much as figures claim, and accusations of spin and even fraud, which is forcing clients to reconsider their digital ad spend.

According to an eZanga report, advertisers in the US waste more than $6 billion a year due to fraud –  networks of ad bots – machines creating countless non-human impressions that brands pay for.

I certainly wouldn’t trust any numbers from digital, we only have to see the scandal of social media and how easy it is to fake followers, likes and views. That’s not to say it’s rife with bad practice but it’s an industry that is poorly regulated and too easy for dubious players to move into.

Consumers themselves are become less trusting of the web due to mass fraud, phishing, malware and sites that over claim and under deliver.

Why consumers love ad blockers

To quote one blogger, Well if you managed to produce meaningful ads and not just some crap, maybe I will be interested. However, I don`t believe in the current advertising ecosystem on the web. It just sucks.”

The number one reason is they hate all the ads “too intrusive, often irrelevant and bad, really bad” was one blogger’s comment. Nearly 48% cite the fact ads interfere with their online activity.

The second reason for installing ad blockers is in fact privacy – consumers hate being spied on and followed about. “For many of us it’s the invasion and stealing of our personal data that makes us use ad blockers.”

The third is because it slows down the system and uses up your data, which is a big issue on mobiles, “why should we pay to get ads?”. Top of ad hate lists; interstitial ads and pre-roll videos.

Other reasons include protecting their kids from ads, fear of malware, reduced battery life on mobiles and removing social media widgets.

And finally, social norming, “because everyone else is using it” (college student).

In the US they have created a new term for intrusive ads “RUDE MARKETING“. When you humanise it you realise why consumers want to block ads online.
Ad blockers like Adblock Plus (by Eyeo) are here to stay and are forcing change. Eyeo’s CEO Tim Schumacher advises marketers to “get creative or get lost”, adding that brands must learn to live with it.” He makes no apology for the change he and other ad blocker software developers are forcing upon the industry, hopping he’ll actually force “a better advertising landscape” for digital and mobile.

Adblock Plus is the world’s number one ad blocker, and has been downloaded over 200 million times on desktops and has over 60 million active global users, which is growing daily. It’s also available for mobiles. Schumacher’s ambition is to reach 100% of millennials.

Besides display ads, it can block tracking, malware domains, banners, pop-ups and video ads – goodbye pre-rolls!!

Ironically he’s a great lover of advertising and believes that in fact ad blockers are doing the industry a service by cleaning up the web of bad ads, bad content (supported by ads) and bad practice. “We want to force online advertising to be more creative.” He also wants to force advertisers to be more responsible.

But he’s not alone in his dislike of badly targeted ads, Facebook’s head of ad tech, Dave Jakubowski believes that on mobiles the banner ad is intrusive and redundant and needs to go.

Adoption of ad blocking is greatest among the very people advertisers want to reach like youth, millennials and affluent middle classes. Most students now have it so that trying to target advertising at them is almost pointless.

Of course ad blocking isn’t new, TIVO allowed people to skip the TV ads, MPS blocked direct mail and TPS blocked sales calls and the data protection act was designed to stop companies abusing data – all resulting in a massive rethink by the ad industry

Will gaming sites win or loose?

The PageFair / Adobe ‘The cost of ad blocking’ report predicts that the gaming industry could be one of the biggest victims of ad blockers as visitors to gaming websites are significantly more likely to block advertising. Given the cost of creating games against a simple editorial site, ad income is critical to earning back their investment.

The video gaming site Destructoid discovered through PageFair that nearly half of their 3 million monthly users had ad blockers, costing the company millions in lost revenue.

Kids have sussed that if you want to play a game app ad free just put the phone on flight mode – who needs an ad blocker?

But good gaming sites get loyal followers so there is much more opportunity to appeal to them to pay. One idea has been a sort of crowd funded model, where players are asked to pay but the fee goes towards the next game in development, giving them a sense of ownership and engaging them emotionally.

Is blocking ad blockers smart or dumb?


To quote one blogger, “Yesterday I hit one that said, “Disable your ad blocker to view this site.” COMMAND – not even a request. I left. There isn’t a website in the global web-o-sphere I need to see that badly!”

Yes, for about 5 minutes because no sooner have you created software that blocks an ad blocker than they have updated theirs and it’s up an running again.

But a lot of experts advise against it as this will only anger consumers. “Any brand that gets past a consumer’s ad blocker will be seen as untrustworthy,” to quote one comment online.

If you’re going to block the ad blockers, you don’t want any brand being put in a situation where a user who wanted to block an ad, then sees it and it has a negative effect.

Brands need to understand that research tells us that it’s not that users don’t want to see ads—it’s that users don’t want a bad experience or unable to get the information they want to get to quickly. So cheating an ad blocker won’t engage a consumer or sell anything. It’ll just make them hate your brand because they feel abused.

Sites that demand you disable your ad blocker just get ignored. Try asking nicely was the technique one Norwegian consumer technology news website used. was one of the first sites to tackle the issue of users blocking ads face on, after discovering 50% of their users had an ad blocker. They implemented an ‘ad block-wall’ which respectfully asked their users to either pay for the content (explaining why) or whitelist them. The results were very positive. However, when I went to their site they didn’t spot my ad blocker, shows how quickly ad blocking technology beats ad blocker blockers.

By contrast, Yahoo has taken an aggressive approach and been preventing some of its users with ad blockers from accessing their email accounts, We are unable to display Yahoo Mail. Please disable Ad Blocker to continue using Yahoo Mail.”. The outcome is people are leaving Yahoo. Proves someone in Yahoo doesn’t understand the consumer at all.

So who is to blame? The advertisers? The agencies? The sales houses? Or the publishers?


To quote a blogger writing about clickbait, According to the Grand Unified Theory of Content, publishing companies have two ways to measure the value of a piece. They look at how much money it cost to produce, and at how much monetizable attention—in the form of display advertising—it captures.”

All you need is for 50% of an ad to be seen for one second and you can bill an advertiser, which means publishers incentivise page views over engagement and clicks over reads. With ad blockers these sites are destined to die.

So who is to blame? Probably all in combination.

The publishers gave the sales houses too much power which they abused, flooding sites with endless ads. The media agencies just bought quantity over quality. The agencies didn’t do good ads because the clients won’t pay for them, wanting them cheap and fast. The clients were led to believe targeting was all and creativity was irrelevant. Even Google, in their defence (after all they are the biggest culprit in placing ads) say that good ads are 70% creative and only 30% targeting. So why are 90% of digital ads so bad – are marketing directors just not listening to experts like Google? Or too busy trying to meet targets?

Publishers like the Washington Post are researching their readers’ attitudes and finding out what is considered intrusive and what is acceptable and what type of advertising they find valuable – then trying to give them more of what they want and less of what they don’t.

The IAB battle against ad blockers

Even though most savvy people are accepting that a new economic model needs to be found, the IAB (USA) are strongly apposed to ad blockers, “We believe in an ad supported internet” they state on their website, “Depriving the internet of advertising dollars will reduce the diversity of voices in digital media.”


They do recognise ad blockers as a “potentially existential threat to the industry.”

They have come up with the L.E.A.N. ads programme – Light, Encrypted, Ad choice supported, Non-invasive ads. They do at least recognise some of the key problems but want a more self-regulated solution and admit that “each digital ad is lugging around so many companies’ requests for data that the ads are physically, literally impeding the delivery of content.“ Adding, “pre-loading ads not in view slows sites down, prioritizing advertising over people’s desire to get to the content quickly.” They agree that ads that cover content should be banned.

IAB website with block

Ironically, while reading their policy on ad blockers and the section on disruption, this popped up in front of the text!

They go on to recommend that, Advertisers and their agencies should voluntarily abandon the most upsetting forms of digital disruption. While autoplay video ads may work in some mobile in-stream environments where a consumer can swipe them off the scream quickly, it may be time to retire autoplay in other contexts.”


Getting advertisers and publishers on board is one thing but trying to complain that ad blocking software is ‘extortion” or “robbery” is very emotive but won’t convince consumers. And trying to convince them that they will lose all those free sites as the downside of using ad blockers is a good and valid argument but one I doubt will persuade. Their solutions are probably too little too late.

There have already been several legal battles against Eyeo (makers of Adblock Plus), but both were lost. The courts don’t agree with the publishers, a Munich court ruled that Adblock Plus did not breach laws on competition, copyright or market dominance, rejecting arguments brought by leading commercial broadcasters ProSiebenSat.1 and RTL.
Fewer ads, better targeted, better quality – is programmatic one answer?

The current chaotic system has led to this crisis, so out of it needs to come some kind of order. I was recently speaking on mobiles and consumer engagement to over 300 people at the PubMatic Ad Revenue Europe conference in London and it was no surprise that ad blockers was the number one topic of conversation – a large percentage of the audience were publishers.

Guy Phillipson, CEO of the IAB (UK), declared an Adpocalypse state where consumers are responding to the cluttered web pages that are getting in the way of the content. The need for publishers and buyers to leverage data to enhance messaging and segmentation and demand higher quality creative has never been greater.

Publishers agree that to fight the ad blocking onslaught it is incumbent upon their teams to enhance the quality of content created and deliver that content to consumers dynamically.

Brands also understand that they need to get back to basics and produce engaging, superior creative that is interesting. If they don’t they may find it’s the publishers blocking them as well.

Part of that requires brands to return to real human insight and not just tech numbers. Number crunchers have little idea about real people, and know nothing about consumer psychology. The secret is getting a balance between the two. Part of the problem has been consumers being reduced to just targets – a word used in warfare to mean something you wish to destroy. How ironic.

Rajeev Goel, CEO and co-founder of PubMatic (ranked by Deloitte as one of the fastest growing companies in the US) points out that programmatic means “publishers can maximise the value of their digital assets – the content, the advertising relationships and most importantly, the connection they make with consumers – and help publishers understand all these things holistically across mobile, desktop, native, video platforms and whatever may come in the future.”

The most successful companies in publishing are those who have been successful in finding a balance between the use of data, technology and quality content and value their relationship with consumers. With programmatic they can cut out the middlemen and manage their own advertising inventory, allowing them to impose their own values and even screen ads.

I personally see programmatic as one solution to this crisis because it “empowers good publishers to take back control of their advertising,” something they foolishly gave away before.

Learning from others

Digital can learn a lot from TV and direct marketing, both industries that took decades to get it right. Serve quality, avoid excess and respect the consumer and they’ll respect you back.

Direct Mail became hated, with millions signing up to MPS and putting NO JUNK MAIL stickers on letterboxes, because of the abuse of the medium, mainly by financial institutions and charities. Bad creative, poor targeting and too much were the main 3 reasons consumers turned against the direct mail industry. Terms like ‘carpet bombing’ summed it up.

Now direct mail is seen as a quality and a highly responsive channel and is growing in popularity again, in part due to declining online ad response rates. Brands like Sky, BT, TalkTalk, Virgin Media, Barclays, Boots and Direct Line spend significant percentages of their marketing budget now on DM (more than on digital ads).

Whereas TV asked for your undivided attention, the web didn’t care as long as you went click, click, click. In fact the idea of the click through as the measure of ad performance on the web was the idea of a direct marketer, Ken McCarthy (back in 1994) which makes it ancient history today. His idea was adopted and became the obsession of websites and advertisers for decades, even if it is now regarded as meaningless by many. Pity the industry didn’t adopt another direct marketing idea, “Make the important measurable, not the measurable important”.

But then is it any surprise that change is slow, most media publishers are still using the Victoria consumer definitions of A,B,C1,C2,D,E which is also meaningless.

As for page views, US based Chartbeat looked at user behaviour across 2 billion visits across the web and found that most people who click don’t read -55% spent fewer than 15 seconds actively on a page, making them worthless.

For two decades, publishers have been using page views as a key metric, now the progressive thinking publishers are looking to measure engagement in minutes and seconds rather than links clicked.

To repeat, consumers don’t actually hate all advertising, just too many irrelevant, bad ones that are too intrusive, it’s all about balance and respecting the consumer.

According to the IAB, the most common reason people would be less likely to block ads is if they didn’t interfere with what they were doing (cited by 48%) followed by having fewer ads on a page (36%). One in seven (14%) would be less likely to block ads if they were more relevant.

Even though some say if there were an ad blocker for TV people would use it, in fact research shows people actually like a lot of TV ads and when playing back pre-recorded shows the majority don’t skip ads.

When advertising is really good creative it’s seen as good by the public, take the new Christmas TV ad for John Lewis, it’s already had over 17 million views on YouTube, last year’s had over 25 million. Old Spice and Gorilla even more. Good ads when entertaining can be as popular as the programmes. So the challenge is, can you make your digital ads as good as the content?

Of course publishers could learn something from the model used by one of the biggest and most visited content sites, that has no ads or subscription – Wikipedia.

It’s founder Jimmy Wales originally planned to use ads for funding but back in 2001 said they’d be non intrusive. But funding by donation has proved so successful they don’t need ads, in one funding session alone they raised $35m.

Will content save the day?

Of course the new fad for 2016 is content, or native advertising. “Forget display ads, it’s all about content” I keep reading on endless blogs and LinkedIn posts. Yes and no, the amount of content on the web has multiplied so much that no one needs any more.

Advertising income has been a stimulant of clickbait sites (also known as ‘yellow journalism’) these are those poorly written junk sites that have engaging headlines like ‘5 vegetables that can make you slimmer’ or ‘10 celebrities that were porn stars’ (I did read that one and it was rubbish).

Those living in the Attention Web use curiosity, exaggeration and celebrity references to get you in just to get the clicks and bill the advertisers. Their existence is driven 100% by generating ad revenue and are the junk content of the internet. Hopefully these will be the first to go with ad blockers.

Content is a great idea but not an easy one to deliver. The idea that brands can all create great content that rivals those created by experienced and expert content creators is a little optimistic. After all, we consumers have lots of places where we can still find top notch content, and ad blockers will actually result in a raised standard of content, so do you honestly think any brand trying to engage millennials, for example, can rival Vibe or the LAD Bible (UK’s largest online entertainment website)? That’s like hiring an agency to write an international hit record. Best of luck with that one!

Chartbeat, who work for Time magazine and thousands of other publishers, have analysed thousands of sites and concluded that on a typical (non native) content 2/3 of people exhibit more than 15 seconds of engagement, but on native ad content that plummets to around 1/3, only 24% of visitors scrolled down the page at all, compared with 71% for normal content. This is because native is rarely as interesting as non native content.

Are we prepared to pay for content?

Yes if it’s good, relevant, informative and interesting.

One of the arguments the online publishing industry use is that you can have free sites without advertising. Actually that’s not factually correct. There are loads of vanity sites out there, including most blogs. Plus endless content used to improve search, just put in any medical condition.

Many consumers are prepared to pay, after all we already pay for newspapers, magazines, cinema, TV downloads – if it’s good we’ll pay. But like so many things that are free, it’s usually poor quality (Evening Standard being an exception).

The FT and the Washington Post, for example, only allow subscribers to access their content online. Quality can demand payment, and these publications get it.

A new model from the Netherlands offers publishers a smart way to get paid for content without adverts, and again proves people will pay for quality content.


Blendle have put almost all newspapers and magazines in Holland behind one paywall, and made it so easy to use that young people (under 35) have starting paying for journalism again. Within it’s first year it has gained over 250,000 subscribers, without doing any advertising itself!

Unlike paying for one publication, the Blendle scheme means you only pay once and can access any article (from their partners) and pay for what you read, with no ads. Additionally, you can reject bad content and clickbait, meaning they don’t get paid. The incentive for publishers is to produce better content. A win, win for both publishers and readers.

Within its first year they have proved that people will pay for quality content and also like the idea that they can avoid clickbait. Top of list are more in-depth pieces, analysis and interviews.


Are ad blockers legal?

Publishers have been screaming “foul play” and even threatening to take legal action.

But, as one blogger commented, “how can an ad blocker be illegal if pushing ads on us, stealing our data and invading our privacy isn’t? Fair point, the publishers really have no argument.


Digital Darwinism – who suffers the most if ad blocker adoption reaches 85%?

It’s very likely that adoption will reach 85%, especially among the key target audiences brands want to reach. We are yet to see who will suffer, who will die and who will adapt. Here’s a top line only.

Google (through DFP) is the biggest provider of ads on the web, so will suffer but they do have paid search to fall back on and with every business it has to peak, it can’t just keep expanding. Ironically, their Chrome platform accounts for 51% growth of ad blocker use.

Apple gains, because iOS 9 includes a refined search that auto-suggests content and that can search inside apps, pulling content away from Google and users away from the web, it allows users to block ads, and it offers publishers salvation in the form of Apple News, inside of which Apple will happily display (unblockable!) ads, and even sell them on behalf of publishers for just a 30% cut.

Facebook stands to lose out online, unless you are using the app. But because it’s an app its Instant Articles will also track you and serve unblockable ads inside the app.

The Apple vs. Google fight has never been more heated or more tense, Google has the web, Apple has the iPhone and Facebook has its app, which gives it an opportunity to present itself as the saviour of media.

Publishers and sales house will fall in big numbers but what we’ll see is less quantity and more quality, so maybe it’s a form of natural digital selection, or Digital Darwinism as it’s been called.


Adblocker web 

Whitelisting – will brands and publishers lose out? Or will the best survive?

Adblock Plus operates a whitelisting system that does allow some ads to get through. Although the process of selection is largely subjective. The vetting system, known as “

” has been incredibly divisive amongst big brands.  Schumacher says “If we white-list a certain ad format, it then goes onto the community forum and sits there for seven days so the people can decide too.”

There has been a lot of controversy about AdBlock Plus’ deals with brands and sales houses. Some people have called their approach “extortion” but as much as the publishers, sales houses and brands may hate ad blockers, Schumacher has the billions of internet users on his side.

Brands will not miss out if they get smart, which they haven’t been to date. First get creative, spend more on better digital ads and you’ll get them whitelisted. Encourage your agencies to be creative and be prepared to pay for it – you don’t get good ads from bad briefs, short deadlines and a low budget. Smart thinkers are starting to suggest advertisers should spend up to 50% of their budgets on execution (or content) and less on spread it across too much media – make each moment count.

I always use the X-Factor example with clients. Media is the equivalent of the stage. You’ve got this far now what are you going to do to impress the judges? Nothing? Just stand there? Well that’s what a lot of ads do. Of course not, you are going to do the best you’ve ever done to engage and win over those judges and beat all the other contenders.

By embracing whitelisted publishers would still get the ad revenue they needed to function, and users would have the control to block sites that go overboard in their ad serving. The outcome is that sites that control their advertising best win and others fail, leaving less completion in the marketplace.

Another simple way publishers can improve their chance of whitelisting is to sell less ads but for more. AOL devised a brilliant new ad format called Devil. It combines static with video but its real genius is that it’s the only ad on the page, which allow sit to command a higher rate.

It’s simple, think human to human (H2H not B2C). Start with the consumer not the content or ad. Even the business to business industry, instead of talking about B2B uses P2P (people to people).


How much do big brands really spend on digital?


Truthfully it’s actually hard to say and what is defined as advertising and what isn’t? If you are comparing it to other media channels, is search really advertising or just directory? What actually is “total digital ad spend?” If you included everyone who spends, from the big brands to the one man online specialist shop, it gives a very different picture than just looking at the top 1000 brands.

The IAB’s latest figures claim that digital advertising in the UK was worth £3.975 billion in 2015, up 13.4% from 2014. Total digital ad spend grew 13.4%. Display advertising revenues grew (others claim they are decreasing) at more than twice the overall digital rate and ad spend on mobile increased 51% to £1.08 billion.

Of course these figures include all advertisers, a look at many of the top 100 spending brands through BRAD (audited by Nielsen) shows a very different picture.

The reality is that most of the top brands are only spending a small percentage of declared marketing budget on digital display ads. The average FMCG brand (in the top 50 spenders) spend over 50% on TV, some as much as 90%, and less than 1% on digital.

Ironically Google spends 61.5% of its budget on TV and 16.9% on digital – good to know it supports its own model. Ironically most of the big digital brands spend more money on traditional media channels than digital ones.

Of the top 40 ad spenders, 50% spend more than 50% of their ad budget on TV. Only 3 (Vodafone, O2 and Google) spend more than 10% on digital ads, while most spend less than 1%. Most spend more on radio than digital ads.

VW for example spend 54.7% on TV, 10.5% on radio, 3.9% on OOH, 2.7% on direct mail and only 2% on digital ads.

Sky, the biggest spender, spends 42.7% on paid TV, 11.9% on OOH, 7.4% on direct mail and 3.7% on digital ads.

Unilever spends 74.3% on TV, 7.5% on OOH and just 0.2% on digital ads. P&G spends 64.9% on TV, 31.3% on press and only 0.5% on digital ads.

The lowest spend, and an exception to all the others is TalkTalk, who spends just 12.4% on TV, 25.1% on OOH, 21.8% on direct mail 20% on press but spends 8% on door drops against 0.6% on digital ads.

Which begs the questions, why is 70% of content in the marketing press about digital when it represents so little of most big brands’ spend? TV is still the favourite media of the top 50. Even radio gets a bigger spend.

Either way, there’s a lot of money to be lost through ad blockers.

Dinosaur omeisaurus

Will the agencies suffer?

To quote a blogger, “Most creative is always terrible. Could digital creative be better? Absolutely. Digital agencies have been chasing technology and not creative execution for the past decade. How many times have we heard “the big idea is dead?”


The bad ones, yes, because they have been churning out junk ads and if you are a client and now want good ones, you need a change of agency, so good news for the more creative agencies.



“Why are people adopting ad blockers on mass? Because brands were so obsessed with data, following consumers around and digging into their private lives – in a vain attempt to understand them – that through their actions, they proved they didn’t understand them at all.”


Ad blockers are here to stay. The publishing and digital ad industry will have to change their economic models and their attitude towards consumers – the customer is now king and he’ll behead you if you don’t.

The outcome is simple. Bad ads not only don’t sell, they now aren’t seen. If you want them to see your ads (or to be whitelisted) you need to respect them and give them better creative ads, that are relevant, interesting and non-intrusive.

And you need to understand them better, forget A,B,C1, invest in proper insights, understanding emotional motivations, even NLP (it’s what sales people use) and combine that with data and use someone who understands consumer psychology to guide you – not a calculator that graduated in maths from Oxbridge.

And don’t be fooled by any publisher claiming to be able to block ad blockers, even if they can, research shows consumers will not like you for ‘cheating’ your way past their wall of defence. It’s like closing the door on a pushy door to door vacuum salesman, only to find him sitting in your kitchen, having come in the back door uninvited.

The outcome will be less junk, more quality. Who could not want that?

Digital advertising is dead. Long live digital advertising. Long live quality publishing.

Chris Arnold is a founding partner of Creative Orchestra, Comobi2 and COGLab. He has been a Creative and board Director of Saatchi & Saatchi and the former chair of the DMA Agencies Council and the Creative Council.

He is also a regular blogger on Brand Republic and contributor to Marketing magazine.




FairPage The 2015 Ad Blocking Report –

Time Magazine – What you think you know about the web is wrong.

Blendle –

PubMatic –

IAB on ad blocking –

Adblocker Plus –

LAD Bible –

Why TV is the new pumping heart of media.


“The media landscape has dramatically changed but TV is still the dominate media. TV is the beating heart of a campaign”. Andrew Challier, Ebiquity

The recent Thinkbox event “TV Response – new rules, new roles” was a fascinating insight into how TV is changing by getting a lot smarter.

The key change is TV’s relationship with online, in the world of a direct response advertising and how different channels work so advertisers can optimise their budgets.

We can all recall the cries that “TV is dead, digital is the brave new world” from those in digital, but the tide is turning.

Ironic, as TV goes from strength to strength, the digital ad industry is in panic over it possible suicide – a constant tsunami of bad and irritating ads hs driven consumers to adopt ad blockers on a mass scale.

Ad blockers have already been adopted by 20% of UK consumers (higher in Germany) and threatens publishers with an end to ad income. Is it too late to reverse the trend? We only have to see the high adoption of TPS and MPS to see how consumers feel about bad marketing and there’s no going back once they are in.

By comparison, TV gets the highest rating for likeable ads, and consumers aren’t bothered by bad TV ads as much as online ads, and if you look at what ads people talk about, around the office water cooler or on social media, almost always it’s TV ads.

Whilst creativity is an important factor in the mix (Google preaches that an ads effectiveness is 70% creativity, 30% media/targeting) this conference was focused on the other aspects of media and it’s influence on other channels, especially digital. Though it may be a good point to highlight that the IPA discovered in a study that creative ads deliver 12x better results.

All media has its strength and weaknesses, it’s widely accepted that TV builds brands and status and is brilliant for emotional engagement, whereas digital is poor at brand building but cheap. But in an era of mass digital adoption, TV is now the great stimulator – from social to search.

Are brands really spending big budgets on digital?

We are constantly being told that digital ad spend is now overtaking spend on big media (TV, OOH, print, radio) but if you level the playing field that’s not actually the case.

Just looking at Alf /BRAD data (supplied by Nieslen) of top brands from multiple sectors, reveals a very different picture for paid media, TV is still the choice of most big brands.

As one marketer said, “TV works really well, you get a truck load of volume!”

10 of the top 15 FMCG brands have moved budget out of digital and back into TV over the last few years.

It is also ironic that top digital brands, Google, Amazon and Facebook are spending millions on TV, so they obviously believe in its power. There has also been a growing number of web brands using TV and outdoor like Airbnb.

In some case the escalating costs of PPC (known as digital heroine) makes TV a more attractive solution. The often under appreciated effect is that people stop using search and just find your brand. One brand saved so much money on PPC it offset the cost of the TV campaign.

Influencing search

It’s claimed that up to 69% of search is stimulated by TV because many of us are now watching TV with a second screen, and being curious creatures, we like to explore and act on impulse. As for the telephone, we really don’t call any more, Direct Line (that company that has that animated red phone) gets 80%t of its response via SEO.

But one of TV’s biggest influences is upon sales – in high street retail, online and direct, the numbers are impressive.

Short term vs long term.

One of the great things about TV is that it delivers short term (immediate response within 8mins), medium term (up to 3 months) and long term (up to 2 years). Whilst a retail brand may see an instant response, a car brand may expect to see 80% of its results after 3 months.


The power to sell

A GroupM study found that media accounts for on average 39% of sales in the short to medium term and that 33% of these media-driven sales are driven by TV advertising – more than any other communication channel. By comparison, paid-for online search created 22%. The study also showed that TV has far reaching, but often hidden, effects across the communications system.

This study also found that TV is responsible for driving an indirect response through online channels, generating 32% of media-driven sales via paid-for online search; 30% of media-driven sales via online display and 20% of media-driven sales via affiliate marketing.

Plus, TV is responsible for driving 44% of all media driven interactions for brands on Facebook (e.g. likes and comments).


Brand TV vs direct response TV.

Today all TV is in effect response led, it’s just some ads demand more of an instant response. Though some of the findings of a study suggest that conventional thinking about DRTV and it’s placement has changed, partly because we no longer call but go straight to digital.

The study also challenged the conventional wisdom of frequency over coverage – seems now we should be going for coverage over frequency.

Test, test and test again

The new ethos of TV is taken straight form direct marketing, test, refine, test, refine and keep testing. Vodaphone has been one brand that has exhaustively tested TV advertising and explored every option and parameter (they conducted over 100 tests) to a point that it now knows exactly how TV can work for the brand.


The challenges going forward

We need to look at the customer journey across all channels and link TV to all touch points. We need to be part of that journey was the message.

We need to make the important measurable, not the measurable important. There is a need to educate clients about what actually maters. Many still live in the old school environment.

We need more joined up thinking, for example TV ads now are extending into other channels like VOD, narrowcast and even targeted in bar media like Captive Media which targets Millennial men. Not to mention the possibility of an ad going viral (note the word ‘possibility’).

TV has come of age, it’s now more sophisticated, more accountable, more influential and more measurable. But the biggest challenge is not to become complacent, as it has been in the past, and to constantly reinvent and to keep up with the consumer.

We now live in an age where technology means the pace of chance isn’t measured in decades, or even years but in moments.



GroupM study reveals hidden effects of TV advertising

Top fashion brands seek to improve conditions for sweatshops.


Levi’s, Nike, Adidas, H&M, Timberland, Puma and many other top fashion brands, organisations and suppliers have got together to launch a new initiative to improve the plight of workers in the fashion industry in Asia, South America and other parts of the world.

The ‘Social & Labour Convergence Project’ (Facilitated by the Sustainable Apparel Coalition) is an attempt to do away with a hap hazard array of different schemes and audits and create one standard of ethics across the board. By having one system that asses supply chains it will be more efficient, more transparent, save money and redirect funds into improving conditions for workers.

It is a response to demands from the European Commission, the Organisation for Economic Co-Operation and Development and several European countries for a standardised, global approach to improving the working conditions of apparel factory workers.

The fashion industry has come in for a lot of flack about their associations with sweat shops over the years, and despite their denials that they really didn’t know what was going on, consumers don’t buy it. They should know, after all, they have a moral responsibility to check and improve the working conditions and safety of the people who manufacture their clothing and other products.

Ran Plaza

In April 2013, the 8 storey Rana Plaza factory complex disaster in Bangladesh highlighted the grim reality of working and living conditions of thousands of garment factory workers worldwide. 41 people, were charged with the murder of 1129 workers, including Sohel Rana, the owner of the complex, his parents, the owners of several factories in the building and a dozen corrupt government officials. Another 2,515 were injured, many seriously.

Bangladesh’s garment industry is worth over $25 billion annually making it the biggest after China, yet workers get as little as 38 euros a month.

The factory, reportedly, supplied many brands including Benetton, Bonmache, El Corte Ingles, Monsoon, Mango, Matalan, Walmart (owners of Asda) and Primark. Back in 2011, Walmart had rejected reforms that would mean retailers would pay more for apparel to help Bangladesh factories improve safety standards. Following the disaster they declined, along with 14 other American retailers, to sign up to a new Accord on Factory & Building Safety in Bangladesh.

What was really shocking was that the building has started cracking and despite other businesses evacuating it, fashion workers were forced to return to the building on threat of loosing a month’s pay.

The disaster created massive publicity, did a lot of damage to fashion brands and retailers, resulted in protest outside shops and boycotts.

It also spawned consumer-awareness and activism campaigns: Fashion Revolution Day, the hard-hitting web series Thread and Sweatshop, plus documentaries such as The True Cost.

It’s not rocket science to work out if procurement squeezes the supplier something has to give and human exploitation happens. You don’t need a degree in finance to know that, so it’s unbelievable when brands sound surprise and don’t take responsibility.

Only this week the food retailers have come in for criticism for being involved with the exploitation of migrant workers on fruit farms, because they were forcing prices down (see Marketing )

Global exports of textiles and clothing are around $800 billion, while £640 million is spent on social compliance audits every year in China alone.

Many will hope that this initiative is genuine and not a PR smoke screen, but I suspect we will continue to se stories appearing over the next few years that will shame well know fashion brands.

Of course the real solution is to manage the whole process and take out the dubious middle men (who are often locals exploiting their own people) and pay a decent wage directly to staff. The wage is such a small percentage of the final price it would make little difference if they added a few pence to the RRP.

Hopefully the Social & Labour Convergence Project will actually achieve real change in Bangladesh and beyond, before we see another disaster.

Chris Arnold is creative partner of Creative Orchestra Advertising and author of Ethical Marketing & The New Consumer.



It is estimated that the total value of transactions using mobile technology is expected to grow to $173 billion by 2017, at a compounded annual growth rate of 31%.

That latest in the race to be the method of choice is CurrentC. But it’s not just another smartphone-based payment system trying to jump on the bandwagon of electronic payment systems, it’s actually been created by many of the biggest retailers in the US.

Developed by Merchant Content Exchange (MCX) and rolling out during August, CurrentC is designed to rival Apple Pay, Google Wallet and Samsung Pay.

The unexpected factor is that instead of using NFC, it uses traditional barcode scanning on a retail terminal to initiate payment. The company argues that this allows all phones, old and new to use the system – good news for anyone with an older iPhone.

It also debits money from a customer’s bank account, not a credit card, which saves money and gives it an advantage over other systems.

Share across Europe

Android has a 68.9% share, Apple holds second position with 19.0% share and Windows is third with 9.7%. But Apple has a 41% share of the US market, and 42.5% share of the UK market. Smartphones now account for 70% of mobile phones in UK. Remember Nokia? Well the Nokia 1100 is still the world’s best ever selling phone.

Who is behind MXC?

MCX is funded by retailers: Wal-Mart, Target, Sears, Wendy’s, Dunkin, Best Buy, Exxon Mobil, Gap and many others.

The consortium set out to create a payments network that could reduce the power of Visa, Amex, MasterCard, the new NFC payment systems, as well as reducing the fees paid to financial services.

Retailers also fear losing valuable shopping and biographical customer data to the other payment methods, whereas CurrentC can merge payments and loyalty benefits, which will give them additional insight into the spending habits of their customers.

Screen Shot 2015-10-07 at 02.18.29

Ways to pay

Visa has been pushing contactless strongly in the UK and with great success, also helped by backing from Transport for London (to replace Oyster).

Apple Pay is a recent launch and up until now Apple have been reluctant to use NFC, but it’s only available in the iPhone 6 models.

Google Wallet was originally launched in 2011 but didn’t gain enough traction until recently and now Google have said it’ll be renamed Android Pay.

Samsung Pay is trading off the success of the Samsung Galaxy, which has been a massive global seller.

Of course you can also use PayPal which is trusted and used by millions globally.

More recently the Paym app has launched, which is backed by the UK banks (Bank of Scotland, Barclays, Halifax, HSBC, Lloyds Bank, Santander, NatWest,TSB and others), and is a peer to peer payment method, allowing you to transfer money via mobile numbers. It is being made available to more than 40 million customers, which is about 90% of UK current account holders.

Zapp is another Pay-by-Bank app and is supported by Barclays (it replaces Pingit) as well as HSBC, First Direct, Nationwide, Santander and Metro Bank.

And what about poor old Blackberry? Well they have announced EnStream in Canada and BBM Money in other markets (both NFC based).

As for other mobile based payment systems, there have been many that have already come and gone, and many trying to get into what is already looking like a crowded market.

Who wins?

There is little doubt that the retailers want to control the payment method and protect their data, but time will tell if the battle between Apple, Google, credit card companies and the retailers will result in any clear winners or just confusion for the customer


Chris Arnold is founder of Creative Orchestra Advertising & the Proximity Mobile Marketing specialists, Comobi2.



There are few brands that can exist without trust and in a competitive environment, trust can be the difference between making a sale or not.

So why do some brands seem to throw it all away so easily by lying, exploiting people or just cheating the tax system.

Who is to blame? It’s not the marketing departments, so should you blame the CFO? Certainly the number one reason behind brands cheating the customer is greed – cutting corners to make a short term gain.

VW’s fall from grace.

There has been a lot written about the recent VW scandal and I shall not write much about it as almost everything that can be written has, but it has been described as “the most catastrophic loss of trust of any brand in 100 year.”

They didn’t just lie to the public but cheated on something that is all about ethics, and in a devious way.

Overnight they have reframed the brand from reliable to untrustworthy.

An amusing thread on Facebook:

JON: “Blimey, if you can’t trust VW, what brands can you trust?”

PETE: “Banks, you can trust banks John.”

JON: “Are you joking?!! You can’t trust banks or anyone in the financial sector, they are all crooks.”

PETE: “Exactly Jon, you can always trust them to be dishonest and unethical.”


Brand bashing

There are obviously brands we deal with that we essentially don’t trust, and others we just like to bash. When McDonalds bought into Pret A Manger and Coca-Cola bought into Innocent there was outrage that trust brands Pret and Innocent had “sold to the devil”. The same was said of Body Shop when it sold to L’Oreal, mainly because of Nestlé’s holding in L’Oreal.

Yet Nestlé, Coke and McDonalds are three of the biggest brands on the planet, because we all buy from them. So why are we so hypocritical? If we don’t trust them then why do we spend billions with them?

Oil companies also get a lot of bashing, and there’s no lack of mocking graphical abuse of their logos. But as one oil company CEO said, if you don’t like us and we all decided to stop producing oil tomorrow there’d be a bigger outrage that American’s couldn’t drive their cars.

It’s easy to be a brand basher, but much harder to live a big brand free life.

Ask anyone who shops as discounted clothes shops if they think sweat shops are bad – most will agree they are. It’s easy to ignore brands that have dubious ethics when the price is cheap or the brand is trendy or posh. Some call these ‘conflicted consumers’ I just call them ‘hypocritical consumers’, they say one thing and do another.

The negative image of many big brands can be unfair, McDonalds has many positive ethical values and I’ve defended them several times against unjust claims.

Many of the big “bad brands’ actually do more good than bad. Starbucks buys more Fairtrade coffee than anyone; they employ local people at decent wages and also use local companies when building new shops. They also put a lot of money back into communities. By contrast that local café you so treasure pays its staff badly, abuses their rights and that Fairtrade coffee may be anything but fairly traded.

Building trust.

  1. The fundamental starting point of building trust is to respect the customer.
  1. The second is how you behave – what you do defines your brand. Not any slick slogan, token ethical or charitable scheme that is all PR or an expensive TV ad.
  1. The third is don’t lie (or spin to appoint it’s deceptive). Be honest.

When Pampers changed the formulae of its nappies water absorbing substance they told people in America but didn’t in the UK. When mothers started to see rashes they panicked and thought they were ‘chemical burns’ (they weren’t). Pampers response was defensive and arrogant, the result – they lost a massive amount of trust from mums that has still not been regained.

Mothers are one group of consumers where trust is essential and no mother will take a risk when it comes to their baby.


When Shell ran an ad DON’T THROW ANYTHING AWAY AS THERE IS NO AWAY, claiming they were using waste CO2 to cultivate flowers, it was true, but by missing out a simple fact (very little CO2 was actually being recycled) it implied they were recycling all of it, which is a lie. It is nominated as one for the biggest green wash ads of all time.

We have come to distrust banks, and in fact the whole financial world, because they continually behave dishonestly and unethically. But if a bank could win the trust and confidence of the consumer it’d clean up.

But we all trust John Lewis and Waitrose because they treat the customer better than any other retailer, and when things do go wrong they respond in favour of the customer, not defensively.

What amazes me is that John Lewis doesn’t leverage the brand to push into areas where trust is key.

Another brand that use to be highly trusted was Virgin. A lot of that was built upon Richard Branson’s trustworthy personality. People behind brands you trust are very powerful, just take the founder of Body Shop, the late Anita Roddick, her values became the values of the brand.

BP gun

It’s not just about sweat shops and customers…

One area that has undermined the trust of a number of well know brands is their failure to pay UK taxes – over 100 firms on the FTSE 350 index have now been accused of tax evasion, with many leading firms hiding profits offshore to avoid paying UK tax. It’s led to boycotts and a lot of bad PR for brands like Amazon, Google, Starbucks and Vodafone and the creation of a new term ‘tax shaming’, which is now included as one element that defines the ethics of a business.

The true value of trust

There is an economic argument to why companies should be honest and ethical – it actually makes you a more desirable brand.

The problem is that too many CFOs only see profit and feed the shareholders as the most important factor in their business, so they think short term. And I have yet to meet a CFO who actually understood consumers; they tend to think of them as targets. The old slogan, “They know the cost of everything but the value of nothing” comes to mind.

If big brands were run by HR they’d all be a lot more ethical and honest and probably more successful long term.

Trust is an essential factor in the economic value of a brand and the fact VW lied has not only wiped millions off it’s share value (it fell by 20% overnight) but also off it’s brand value. Longer term I doubt it will ever be able to rebuild the trust lost and return to the pre scandal levels of trust it had. And the word ‘ reliable’ will be I doubt we’ll see again under the logo.

Online, negative sentiment around the VW brand increased by 1,998%.

Can you buy trust?


One of the reasons Coke bought into Innocent was the fact people trusted it and to sell an orange juice that would take on Pepsi-Co’s Tropicana brand they needed a brand people trusted. It worked. Ironic they didn’t do the same with Zico their coconut water. It’s well known on the circuit as the least desirable because it’s made from concentrate and almost all the other aren’t – that’s the power of a connected consumer, the truth soon goes around.

Being economic with the truth is still being deceptive.

I think consumers have got smart to any product claiming to have less of something, knowing it probably has more of something else bad. Thanks to numerous TV shows and media coverage, we have discovered the truth about many products, about sugar, salt, artificial flavourings, E numbers and the many things we didn’t know we were eating.

The horse meat scandal didn’t just reveal that supermarkets could not be trusted to check the source of the food they sold but it revealed a lot about the process food industry that was less than tasteful.

With the fad of ‘Gluten Free’, brands are now being exposed for replacing gluten with unhealthy alternatives.

Once lost, can you rebuild trust?

The other catastrophic loss of trust of a brand was Sunny Delight (aka Sunny D). When mothers discovered it wasn’t what it implied (note lied is the last 4 letters of implied), it wasn’t a fresh orange juice product but artificially coloured sugar water, the brand sales crashed. The real question was why did the company lie and deliberately go out to deceive the consumer when they could have actually sold them orange juice?

In today’s socially media connected society it’s a guarantee that if you lie (or imply) you will be exposed. It is a very dumb company that thinks it can con the consumer for long.


When Sunny D attempted to rebuild the brand I was one that advised them it was as dead as the parrot in the Monty Python sketch and trying to make the brand fly again was a joke.

It’s all about emotions.

Brands are like people, we want to trust them but trust can easily be broken. And once it is, it’s hard to win back. You can’t argue your case because it’s not about logic but about how people feel about you, and as we all know, consumers buy 80% on emotions.

Chris Arnold is founder of Creative Orchestra Advertising and Comobi2.

Are late payments smart accountancy or bad ethics?


Clients are “unfair and greedy” in their approach to paying agencies, according to the MAA (Marketing Agencies Association).

I think few agencies would disagree with that.

However, few CFOs’ seem to get it.

When it comes to trust, estate agents, journalists, used car salesmen and marketers were pretty much at the bottom. But now it’s the world of finance – bankers, City dealers, shareholders, pay day loan companies and…. CFOs.

It’s not some kind of plot by the media but a simple fact – people judge you by the way you behave – and the financial industry over the last 10 years has shown nothing but contempt for moral principles, ethics and even the law.

It has been criticised for its culture of greed and lack of moral compass, so it’s no surprise that one of the biggest issues facing the marketing industry is not actually the usually complaints – lack of good briefs, clients who are less brave, short deadlines, declining quality standards – but late payments.

It’s hard enough as it is to find clients who aren’t squeezing agencies to do more for less, but what adds insult to injury is the growing length of payment terms.

The MAA view

The MAA, a trade body who are not one to shy away from topical issues, has recently started to raise the question of finding a solution to long payment terms and the many dirty tricks CFOs practice without guilt.

They recently held a seminar with the Guardian to a packed house, proving how topical an issue this is.

I think we can all list many big brands who abuse agencies this way, and it really is an abuse. There are also those in the economic sector and government who fear that big brands are damaging the UK economy with these unethical long payment terms, after all 95% of companies in the UK area SMEs and are responsible for 48% of UK private sector employment, so are vital to economic growth.

Brands like Premier Foods are just one of many that have been publicly criticised for unethical payment terms, they even featured in a BBC Newsnight for practicing “pay and stay”: asking suppliers for money up front just to be considered for work, which really is as unethical as you can get.

Premier Foods launched its “Invest for Growth” program in July 2013. To improve its cash flow and pay down debt, it asked suppliers to “invest,” or lend, money upfront to them to continue doing business with them.

The recent recession gave big brands an excuse to extend from the common practice of 30 days to 60 and 90 and some to 130 and 150 days.


Mondelez International (Cadbury, Kraft and Philadelphia) has payment terms of 120 days. Procter & Gamble has payment terms of 45 days to 75 days. AB InBev have 120. Brewer Molson Coors (Grolsch and Carling), entered The Forum of Private Business ‘hall of shame’ over its supplier terms in 2010.

To ad insult to injury, several of the above brands have offered their agencies loans (with interest) to cover the gap until they are paid!

You really have to ask, “Just how unethical are some CFOs?”

With 72% of agency work being now project based and income fees declined by almost 20%, agencies are under sever financial pressure.

“The government can’t call for enterprise and innovation whilst allowing corporations to behave like this,” said MMA MD Scott Knox said. “What more do corporates need?”


The IPA view

Alex Hunter, the finance director of the IPA said, “It is surely nonsensical that agencies – many of whom are SMEs – should act as banker to these major corporations, merely so that these corporate giants can demonstrate strong balance sheets to their analysts each quarter. With interest rates at an all-time low there is no real commercial value in unilaterally extending payment terms. Those at the receiving end of this pressure are precisely those hired to add value to these major companies through their commercial creativity.”

Even those brands, like one well know newspaper group, who claim 30 days payment terms are often less than honest. 30 days may be from the end of the month in which the invoice is submitted – which can’t be done until the PO has been issued, which seems to take forever. So even a 30 day rule allows CFOs to cheat the system.

Thomas Cook recently asked for a £1 million “signing-on fee” for the agency that was awarded its media account. “Realistically, clients need to be embarrassed into changing their ways,” said Paul Bainsfair, the director-general at the IPA.

The FSB view

The FSB (Federation of Small Businesses), which represents over 200,000 SMEs in the UK, are deeply concerned about the damaging effect big brands are having upon suppliers. Just look at what’s been happening to milk farmers!

Over 50% of their members had experienced late payment.

The FSB have been calling for an independent inquiry into the UK’s poor payment culture and an independent inquiry to tackle late payment and supply chain bullying.

A survey they conducted found that late payments have resulted in 30% of its members having less ability to grow, 32% saying it made them pay their own suppliers late and 15% saying it resulted in difficulties paying staff.

Xerox, named and shamed by the FSB commented on a case of late payment, “Company policy is not to pay any invoices in the last quarter of the year.” 

Graham Buck, regional chairman for the FSB said,  “Late payment and the UK’s poor payment culture are difficult issues to address. We acknowledge Government’s attempts to find a solution, including the Small Business Bill, but the situation is continuing to deteriorate. To get real change in how large companies do business, more decisive action must be taken.”

He went on to add, “The abuse of small firms in their dealings with bigger businesses cannot be allowed to continue. We have seen the UK’s payment culture significantly deteriorate in the past five years. The gradual creep of payment terms from 30 days to well over 100 days in some cases, coupled with debilitating contract terms, can have a disastrous 
effect on a small firm’s ability to operate.”

Late payment has opened up the door for factoring agencies and other businesses. Recently I came across this on my LinkedIn – “We believe businesses have the right to Get Paid On Time. That’s why we’ve built Satago: a clever automated accounts receivable platform integrating with most cloud and desktop accounting software. It takes the hassle out of chasing debtors and boost your cash flow with one click so that businesses can spend more time chasing new customers and doing the work they love.”


The agencies view


Omnicom boss John Wren has recently turned away business from clients seeking extended payment terms. “We’ve turned down and not accepted clients that we could have won because we weren’t prepared to accept the terms they were offering.”


He further added, “We’re not a bank. I think if you speak to my competitors, they’ll all three agree with that concept… that’s not what we’re here for. And anybody who wants to treat us like a bank can go to a bank.”


WPP’s Martin Sorrell has also gone on record to say, “We are not a bank”.


The Government’s view


It estimates small firms are owed £26bn in late payments – and chasing debts costs them millions of pounds more,” according to Business Minister Anna Soubry.

As part of the new Enterprise Bill, the government plan to create a small business commissioner to tackle the power “imbalance” between small and large UK businesses and deal with outstanding payments and supply-chain bullying.

The new commissioner will have the power to refer large debtors to the Competition and Markets Authority and would:

  • – be a point of first contact for small businesses and provide advice and support on how to avoid disputes and how to resolve them
  • – offer access to mediation services to sort out issues quickly and affordably, “at a fraction of the cost of going to court”
  • investigate complaints over unfair business practices and regularly report its findings.

The government’s own policy on payment terms is clear and Vince Cable has stated publicly that too many large companies have been getting away with not paying their suppliers on time to maximise their profits.

“If you haven’t already agreed when the money will be paid, the law says the payment is late after 30 days for public authorities and business transactions after either:

– the customer gets the invoice.

– you deliver the goods or provide the service (if this is later).

You can agree a longer period for payments from one business to another – but if it’s longer than 60 days it must be fair to both businesses.”

Well the way big brands are acting is anything but fair.

“The interest you can charge if another business is late paying for goods or a service is ‘statutory interest’ – this is 8% plus the Bank of England base rate for business to business transactions.”


But do agencies fair any better when it comes to paying on time? Sadly not, some are just as bad, often blaming their clients for paying late. One well known large agency had a reputation for making suppliers wait 9 months to get paid.

Is there a solution?

Moving forward, what is needed is legislation that is enforced and puts the interest of the economy over those of the shareholders of a few big corporations. We obviously can’t trust CFOs to act fair; their moral compasses have drifted too far away from what is ethical.

Small agencies are sadly in no position to demand better terms, as they don’t command the respect they use to, and they can get little support from marketing as few Marketing Directors sit on the board. But the big giants like WPP and Omnicom could make a stand.

As an industry with over 20,000 creative agencies out there, it is impossible to expect any unified action. And if you do say ‘no’, someone else will say ‘yes’.

The only other way forward seems to name and shame.

Or to unit together and use our skills to market the idea to board directors of big corporations why they should pay within a reasonable time.

One of my creative teams recently scripted a video that asked, ‘What would happen if CFO’s behaved in the real world as they do in the corporate world?”

It starts with a man walking out of Tesco with his shopping and saying, “please send the bill to my office and we’ll pay in about 90 days,” as the checkout girl looks dumb founded. He then drives off from a petrol station having not paid for his petrol… you get the picture.

When he finally gets stopped by the police to explain why he has left numerous places without paying he simply says, “ It’s OK officer, our policy is never to pay in less than 90 days.”

As the officer puts the handcuffs on him he comments, “I really think this is unfair.”

The video ends with the line.

Should financial directors who bully small businesses and pay later than 30 days get 30 days in prison?

76% of small businesses surveyed believe they should.



Taking the pizza by taking a slice of tips.

Pizza Pounds

It really is one of those stories that makes for great radio phone ins – a large corporation taking a percentage of their underpaid staff’s tips (the average gets the minimum wage, just £6.50 p/h).

But the recent protest against a ‘tip tax’ don’t just apply to Pizza Express but it’s claimed other restaurants and groups apply similar tip taxes, including ASK and CDG group which takes 10% (they own Bella Italia, Café Rouge and Belgo).

The actual claims, by the Unite union, are that Pizza Express take 8% fee from tips paid by card. These restaurants claim that this tax on their staff is to cover the costs of managing a Tronc system “correctly and fairly”, and insists it does not make any profit from the practice.

One researcher claims they take over £1,00,000 a year from their staff across 430 restaurants.

A recent report by Mintel cites ethics as a key consumer trend, “Growing awareness of customer rights and corporate misbehaviour will see consumers demand more fairness and justice from companies and companies consult consumers more.”

It’s ironic that 2015 is the 800th anniversary of the first ever citizen’s bill of rights – the Magna Carta.

Mintel highlight that the ethical treatment of workers is a key factor for almost half of all consumers (44%) and more important than environmental policies (33%). While in the US, 82% of diners believe a restaurant that treats its employees fairly influences their restaurant choice.

Mintel’s consumer trend ‘Buydeology’ has become a way to express one’s opinion on a brand, company, or issues and already features pay day loan companies, tax-dodgers, animal-rights abusers and companies that pay low wages!

The Unite union has backed the protests and is supporting restaurant workers with an online petition and survey.

David Turnbull. a spokesman for the union, compares the unethical practice used by Pizza Express to other restaurants. “The Restaurant Group (owners of Frankie and Benny’s, Chiquito and Garfunkels) hand 100% of tips paid on cards to their staff. If they can do it, why can’t Pizza Express?”

“The message is, tip cash only.”

In an age when consumers are becoming more ethical, in any competitive market the decision to go to one brand or another can be determined by how a brand behaves, not by what it’s gloss ads or social media says.

“Reputation is everything,” as they say, and Pizza Express’s is in big trouble





Ikea goes greener by buying its own forests.


It’s a simple idea, if you want to control every aspect of your green credentials, when it comes to wood, then buy a forest.

Ikea have been very vocal about their commitment to sustainable and low-cost production, so it’s no surprise they have purchased woodland in Romania – 33,600 hectares – and the Baltics to coordinate there own forestry management and wood production.

They also own 10,000 acres of woodlands in Estonia, Latvia and Lithuania. It’s estimated they have invested over €100m so far in woodlands, by buying forests it means they can control timber costs too.

They can also been investing in renewable energy and biomaterials,

Romania thus becomes the first country in which it has the whole cycle, starting with its own timber resources, furniture production via its direct cooperation with Romanian suppliers, and ending with the retail business via its stores.

Ikea also plan to alter the density and thickness of certain designs. Recycled wood is becoming a larger part of Ikea’s manufacturing and designs. They have also been working on optimising their product designs to make the best use of trees.

IKEA designs some of its Norden series tables so they use the tops of trees and irregular-looking bits that wouldn’t otherwise be used.

The Skogsta range is made of Acacia, a type of tree that is light blond in the middle and darker on the outside – the range use both shades of the wood, rather than just the dark wood, which the furniture industry has historically used.

By 2020 they aim to use only recycled or certified sustainable timber (by the Forest Stewardship Council) in all of their products – so far, about 50% of the wood it uses meets either criteria.

Ikea’s commitment to becoming greener and more ethical is more than PR hype.

They stopped using plastic bags. They are investing over $70m in clean technology start-ups, like solar. They recycles 84% of the waste generated in stores.

When a country introduces stricter emission rules, IKEA imposes the new restrictions on its global operations. As a result, Ikea’s policy reflects the strictest emissions policies in countries across the world, even though it sometimes drives costs higher.

IKEA’s sustainability initiative, IWAY, focuses on four areas: products and materialssuppliersclimate change and community involvement.



However, Ikea has not been without criticism.

China is a major source of materials, providing 22% of IKEA’s sourcing and a country that is hard to audit.

The retailer used the equivalent of about 530 million cubic feet of wood last a year, excluding paper and packaging.

They produce a lot of cardboard boxes, probably more than anyone in the UK, much of which ends up in landfill rather than recycling bins. However, one creative company has come up with an ingenious consumer engagement idea that can reduce this by 70% called ‘Upp Cykle’ (not yet adopted by Ikea).

Ikea were banned from logging in the Karelia forest in Russia after the Forest Stewardship Council accused an Ikea subsidiary of violating its sustainability agreement because it was claimed to be ‘logging old forests that have high conservation value’.

There are no lack of eco-critics who shoot holes through Ikea’s claims.

However, big corporations can also make big differences when they turn their mind to it, and there is no doubt that Ikea is going in the right direct, for whatever reason.


The Ethics of Pitching

Pitch Watch logo final

The MAA (Marketing Agencies Association) are taking the lead among trade bodies and demanding fairer pitches. This was something we tried to do at the DMA with both the Creative Council and the Agency Council (which I both chaired), but alas the DMA at the time didn’t have the punch to push through.

The MAA has to be admired that it really does take the bull by the horns and isn’t afraid to take on the big brands.

Scott Knox, managing director, the MAA, said, The Marketing Agencies Association has published a set of rules for clients to follow when pitching their business, to ensure “fair and reasonable pitch practice”.

The best practice guidelines stipulate that clients limit the number of agencies they meet for a chemistry to just six and the number they invite to actively pitch for their account to just three agencies.

The ‘MAA Pitch on a Page’ also recommends that full pitch feedback from clients is given within five working days and that any client pitching its business must make itself available for tissue sessions throughout the pitch process.

The publication of these Best Practice guidelines come shortly after the trade body branded AB InBev as displaying “despicable pitch practice”.

There are cases of pitches that have involved up to 50 agencies. the most famous ‘scam pitch’ was the P&G one in 2002 that cost the industry over £600,000 in costs. The MAA recommend no more than 3 to pitch, 6 for chemistry – after all, if you actually know what you are doing why do you need more? Alas there are too many clients who don’t know what they are doing and there’s nothing like a big pitch list to give it away.

There are few in the ad industry that wouldn’t disagree that pitching has got worse and more exploitative, and more expensive – some clients still think it’s all for free!

Hopefully the MAA may be able to pull us back to a more ethical process. I’m backing them all the way.


At last, a political campaign we can actually like.

At last, something about politics that we actually want to see and want to share on social media.

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