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All about TRUTH as The Marketing Group adopts blockchain

Media buying has been rocked by regular reports of widespread kickbacks throughout the industry.

Picture of pound notes
Keeping tabs on where the money is going is the aim of TRUTH

Media buying has been rocked by regular reports of widespread kickbacks throughout the industry.

Highlighted in a damning US report last year, Adam Graham, chief executive of The Marketing Group, says the topic is still dominating the sector.

Transparency is the new watchword, but Graham believes few agencies are doing much more than pay lip service to show how much of a budget actually gets spent on media buying.

As much as 90% of a budget can end up being siphoned off along the way, he says, which is one of the reasons TMG has set up its TRUTH agency, with payments to be based on blockchain technology.

A game changer

Blockchain is a game changer says Graham.

While best known as the technology behind bitcoins and other cryptocurrencies, Graham believes it is the ultimate kitemark for transparency.

Blockchain has a fantastic provenance, he says.

“An immutable, distributed ledger with cryptology that is impossible to corrupt and, most importantly, the data cannot be altered after the fact.”

Something that happens 'a lot' at the moment, he adds.

TMG will build its own blockchain ledger to log data along the value chain to show exactly where a media budget has gone.

He believes the fact there are no legacy issues for TMG gives it a tremendous advantage over its larger, longer established rivals.

“By building it with block can we can prove demonstrably the transparency in what we are doing and that we will return more value to clients.”

Middle ground

Graham sees enormous potential in the middle ground between the media giants such as WPP and Publicis and the tiny creative hothouses.

“We can provide global scale, a lower risk profile, but still retain the independent spirit of a small agency with ‘braver creative, a faster response and better value all around’.”

He points to London-listed M+C Saatchi, worth £250mln currently, as a good benchmark for where it aims to be in the short term, though this is only likely to be the first step.

Digital communications can change the model of the traditional ad agency, where he says a lot of business is an opaque black box.

TMG will offer a full range of marketing services covering advertising, digital, TV, data and insight, social media, platform builds and programmatic media, but Graham says there is no need to have a presence in every country now to provide a full global service, just key locations with people who understand the cultural differences.

“We can be a challenger to those large networks. We don’t have legacy issues and, by disrupting the network model, we can deliver a lot of value to clients and shareholders.”

Margins climb

The third quarter of 2017 saw turnover of €7.04mln, taking turnover for the first nine months of the year up to €19.59mln.

Net revenue of €4.26mln took year-to-date net revenue up to €12.6mln.

Underlying earnings, or EBITDA, in the third quarter clocked in at €679,000, which means EBITDA for the first nine months of 2017 stood at €1.45mln.

The group said it is seeing more collaboration between its agencies around the world and an increased ability to provide a consolidated offering to clients.

The increased collaboration is leading to incremental new business wins and additional revenue being retained within the group, providing a solid base on which to launch new initiatives.

 “Alongside the roll-out of TRUTH, we will also continue to develop TEMBA, our internal collaboration platform, as a core part of our strategy of harnessing technology to provide a highly effective global marketing solution,” said Graham. 

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