🔥Hot Take: ROAS is a conflict of interest

It is hot-take-Tuesday, and ROAS sits in our conflict of interest crosshairs.

Travis Lusk
Travis Lusk

Is "Return on Ad Spend" (ROAS) a scam? Ok, maybe that's a bit of an aggressive question. But certainly, it is fraught with conflicts of interest, right?

The second session at the ANA's Advertising Financial Management Conference in Orlando focused on a joint study between the 4A's and the ANA, led by the research firm Advertiser Perceptions.

The crux of the study focused on the things that both agencies and brands appreciate (and hate) in their relationship, focusing on what each side of the table values most. Not surprisingly, brands care most about ROAS followed by things like "trust."

What is fascinating and very troubling to me is that agencies and brands ranked "trust" highly in their stack-ranked list of values. However, only 22% of brands ranked "increased transparency" as important.

WHAT?! Only 22% ??

Brands have conceded ROAS measurement to their agencies

Media procurement and finance teams do not appreciate that transparency and ROAS are directly linked, to the point where they do not recognize the inherent conflicts of interest that have arisen.

Let me paint a picture for you:

Principal-based media buying ✚ Principal-ownership of targeting data ✚ Principal-ownership of outcome measurement vendor contracts

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