Article contributed by Matt Prohaska, Partner, Prohaska Consulting
Like millions of Americans, I read Steven Brill’s fantastic investigation last week for Time entitled “Bitter Pill” that revealed why this country’s health care costs are so outrageously high and how they are crippling our economy. All the noise around our health care system during the Obamacare debate and very few asked the right questions or actually dug into why we are where we are. Having been a fan of Mr. Brill’s from his work at Content, Clear, and the original CourtTV, I was excited to see something celebrated that happens far too rarely these days in mainstream media and primarily why I went to Syracuse University…what’s it called again…oh yeah…journalism. Meanwhile, fixing that system in this country is a personal passion of mine, where I often wish I had more time and money to help solve the massive problems. If you haven’t read it yet, or seen any of his interviews the past ten days, and you care about this country’s success, and/or have someone you love that has gone through a nightmare situation with hospitals and/or insurance, please block out some time to read it.
As I was reading Mr. Brill’s analysis, as usual I started translating the key takeaways to my world and our industry. Three examples came to mind. Imagine if your last experience with a hospital was how your consulting engagement went, where the consultants were your hospital. Brill gives an example of one patient being billed $7 for each “alcohol prep pad,” which is really a swab of cotton that can be purchased online in a pack of 200 for $1.91. Yes, a premium is deserved for any product that is applied by a specialist in a contextual environment (part of why ESPN gets higher CPMs than sports publisher X). But maybe not 736 times higher. I heard a story last year of a well-known media consulting firm that charged a digital publisher $30,000 to get in front all the key senior management of a top agency. What the client got was a 60-minute lunch ‘n learn with four assistant media buyers. Hopefully those four had a lot more budget and planning control than most for future RFPs and IOs….
Or take Brill’s look into medical device and pharma sales reps spending heavily on doctors to push their products and subscribe more expensive tests than necessary. Could an analogy be made with sales reps from top publishers, or mid-tier publishers trying to “break through,” treating digital media buyers to the now-standard Hamptons summer house? I know it’s not a 100% direct correlation, and, hey, the saying certainly applies here literally that “what we do isn’t brain surgery,” but you hopefully get the idea of seeing either where clients are taken advantage of or at least agencies not always having their client’s best interests, or true marketing objectives, in mind all the time.
Or look at Brill’s example of the triple billing that happens constantly when hospitals charge a daily rate for staying in an ICU, then charge again for the equipment kit used in the ICU, then charge again for every bandage used in the kit. Can an analogy be made around how some agency holding companies’ trading desks and direct buying teams end up double-charging their clients for buying media programmatically?
Sure, every industry has inefficiencies, and usually I have found the greatest inefficiencies can be seen at the beginning, when companies are still getting established in demonstrating real value, and at the most mature, when companies get so huge that they have the economic and political clout to tilt the game to their favor. Our digital marketing and ad tech industries are still relatively new, despite some quickly-dominant players. So let’s all work within our own companies and together across companies (like through the IAB) to make sure clients and consumers continue seeing real value from us and avoid getting sick from some taking advantage of the system. Because there is no way they, or we, can afford the hospital bills.
What’s the greatest inefficiency or injustice you see in our industry today, or have personally experienced before?