What you need to know:

• After two decades at GroupM, Dave Gaines quit to ultimately launch Media by Mother, the NY-based media buying unit of creative hot shop Mother.
• Three and a half years later, it’s doing US$400m in billings – and doesn’t take a percentage from trading mark-ups.
• Which means Gaines can call it how he sees it – and does.
• In short, Gaines thinks advertisers and their peak bodies are guilty of hypocrisy, with agencies complicit. Case in point, defunding digital news media due to “brand suitability” concerns as his former employer has admitted to.
• Likewise “virtue signalling bullshit” from advertiser peak bodies over programmatic murk. That’s been going on for years, per Gaines, and those holding the purse strings have had ample time to do something about it.
• Gaines also agrees with former UM privacy chief Arielle Garcia that the data underpinning the digital promise of personalisation at scale is woefully inaccurate.
• The solution, per Gaines, is to hire smart people, broaden their training and remits to do better upfront work to drive actual outcomes – then leave the “rote, repeatable” media tasks to offshore experts, and the machines.
• But if any of his core team send briefs offshore? “They are getting fired”.

Percentage gains

In less than four years, GroupM stalwart and one-time Maxus Australia boss Dave Gaines has built a USD$400m-billing independent agency in New York that doesn’t make any money on media mark-ups. But that doesn’t stop brands trying to get Media by Mother to take one – for 60 per cent of what they are paying their incumbent agency. Then marketers get angry when he tells them a way to actually grow their business rather than get arbitraged. Then they go to a holdco and get arbitraged.

Gaines is okay with that. He agrees with former UM privacy chief Arielle Garcia that brands and their agencies buying the myth of data-driven personalisation are also getting fleeced, because data brokers and the targeting supply chain has zero incentive to maintain accurate audience profiles.

“Even the best case scenarios, they're not cleaning the data. There's no interest for them in them doing it,’ Gaines told Mi3. “It's exactly what media buying used to be. They're just trading on fucking volume.”

Gaines questions if audience metrics are even worth anything anymore – and whether agencies should be trading 100 per cent on outcomes, with brands and buyers then just “making up their own mind what an impression is worth” in any given channel or pool.

That’s the approach a lot of bluechips are already taking in private marketplaces, said Gaines, where “the cost per thousand has got less to do with just basic audience traffic and more to do with a cost based on return on ad spend”. Maybe it will ultimately become the overriding norm. In the meantime, those outcomes-based private marketplace “dark pools” arguably render broader procurement CPM ideals redundant.

But a lot of marketers remain ignorant of that reality, per Gaines, wilfully or otherwise.

“I think they get to a certain size and then they care less, because it’s just about volume.” Gaines claims Media by Mother bailed out of two recent pitches where volume was the primary concern – because the agency doesn’t make its money off trading. He cites the most recent:

“The client said ‘We will hand you the business, but your fee needs to be 60 per cent of my current agency's fee’. I said, ‘I don’t even know your current agency fee, but I do know your current agency, and I do know they just put bodies in a room and you pay them because they breathe, as opposed to doing any actual work.’”

Gaines made a counteroffer.

“I said, ‘Why don't you let me show you how to sell double the amount of product on half the budget and you pay me twice as much as your current agency.’” (His ethos is to hire and train smart people to do smart stuff across the gamut of media and creative, backing them to deliver better outcomes.)

The upshot? The prospective client “got rather angry” and told Gaines that the $20m account would be going to a holding company.

“I said, okay, but for them the budget you have is not big enough to get the calibre of people you need to grow your business. But it is big enough to be arbitraged. So they will take your money, show you some bells and whistles and run your budgets through their machines – and you’ll probably get your 60 per cent fee. But if it’s no good for your business, why are you doing that?”

The not-to-be client had already walked.

“I don’t care,” per Gaines. “If three per cent of the market loves what we do, this thing will grow beyond my wildest dreams.”

Outsourcing, automation

One way or the other, Gaines thinks increasing media automation will prove out Media by Mother’s approach.

“I am very comfortable about a world where we don't make money from trading income. We are strategists, planners, analysts. We can be hands on keyboards if you need us to. But we’re not doing the rote, repeatable stuff, which is effectively where tech is going. If you want folks who are just hands on keyboards banging away, making sure that things are optimised – you're still going to need analysts who are looking at it every day saying, ‘this needs to be dialled up, this needs to be dialled down.’ That's us, and the teams that we’ve built offshore who do that work for us are exceptional … you’d almost call them manager-level media buyers,” said Gaines.

“We pay over and above in India, because all of the holdcos are doing exactly the same thing. But they're strapping them down, and they just throw briefs into those offshore pools. We don't do that. The brief is ours.”

Any Mother who does throw a brief to the offshore teams, he said, “is getting fired”.

Brand complicity

Gaines thinks advertisers and their peak bodies are also guilty of hypocrisy, with agencies complicit.

Defunding digital news media due to “brand suitability” concerns – as cited by outgoing GroupM boss Christian Juhl to US Senators few months back – while funnelling ever-increasing amounts of money into walled gardens algorithmically programmed to “amplify toxic content and lies”, per Gaines, is a prime example. Especially when Section 230 (explainer here) means those platforms are not held responsible as a publisher.

“What we're seeing come out from Google and Meta [Performance Max and Advantage+ respectively] is essentially AI-powered media placement, black box shit you have no control or visibility on where it's going to go, and no log afterwards on where it's been,” he told Mi3.

“At the same time, we've got blacklist and suppression all over the place on news. What is going on where an industry can see, can forgive, or look over one part and not the other?”

Meanwhile the gap between what is being produced by platforms categorised as ‘social media’ versus ‘legacy media’ is shrinking all the time. In terms of reach, production quality and budget, Gaines cites MrBeast and YouTube as an example.

“Unless you put those rules in place right now, you potentially end up with platforms which are technically categorised as social media being able to run roughshod over all of the rules that legacy media and all of this toxic amplification of content,” he warned. All while convincing marketers that brand suitability rules are only now applicable to their onetime publisher rivals – and convincing media buyers that non-auditable black box AI investment allocation is 'A Good Thing'.

“This is what annoys me about [US peak advertiser body] the ANA sending these virtue-signalling bullshit overviews – ‘programmatic is terrible because we're wasting money’. Well, you guys [i.e. marketers] are the customers of these platforms, you can decide collectively,” said Gaines. He thinks advertisers need to stand up to platforms that attempt to shut down industry initiatives with “bullying” behaviour, as Elon Musk did with responsible media program, GARM.

“It doesn't need to be collusion [as X's lawsuit alleged], it can be collaboration. We need to put pressure on these platforms to just agree that Section 230 will get changed,” per Gaines.

“It’s got to change before AI is making the decisions.”

Perhaps there is still time.