"Data-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Adrian Tompsett, vice president of business development at DataXu.
Folks continue to lament the lack of brand dollars in digital, especially in the auction-based exchange environment.
One of the primary reasons we do not see more dollars flowing – other than for tracking performance of CPA campaigns – is because the supply side does not provide enough transparency into what it is selling.
That’s why we need to take a cue from a consumer law passed under Lyndon Johnson in 1966 that says informed consumers are essential to the efficient functioning of a free-market economy.
“Packages and their labels should enable consumers to obtain accurate information as to the quantity of the contents and should facilitate value comparisons,” stated the Fair Packaging and Labeling Act. “Therefore, it is hereby declared to be the policy of the Congress to assist consumers and manufacturers in reaching these goals in the marketing of consumer goods.”
That’s in stark contrast to buying impressions from exchanges, which have no consistent categorization, even within a single exchange. Sites are routinely anonymized or passed through with incorrect domain information. The same publisher may be available across multiple exchanges, but performs markedly different with no label to explain why.
There is no guarantee that your impression is a real impression or one of the many bots in operation today. Above-the-fold and below-the-fold flags are inaccurate to the point where you are better off flipping a coin. This list goes on and on.
The consumer equivalent would be unlabeled boxes with inconsistent contents – or no contents at all. One day the box includes chicken crap; the next day it’s chicken salad. More often than not, it’s a mixture of both.
Digital-media buyers do this every day.
Luckily for marketers, things are not as grim as they sound. Despite these known limitations, the buy side has built a data-driven set of prebid, real-time tools and analytics that delivers advertising effectiveness. Within the leading digital marketing platforms, tens of millions of dollars have been invested in building sophisticated algorithmic bidders, which seek to “infer” data that, in a transparent world, could have simply been passed in the bid request.
Additionally, most savvy platforms have deep expertise and analytics internally to continually improve and supplement the machine-based efforts. Finally, there is a sea of third parties out there designed to protect the buy side. Whether it is bolting on semantic technologies to better understand context or validation services to keep the supply side honest, there are many options available.
All of this makes a huge difference to buyers, and ultimately burdens the cost of digital media with a transparency tax. And most damaging to the publishers working with exchanges and SSPs is the fact that consumers and digital media buyers react to uncertainty in exactly the same way: with their wallets. In our world, this means buyers bid lower and purchase less programmatically than they might have otherwise.
There are several things the supply side can do eliminate these transparency issues and unlock spending on the buy side.
- Implement better controls and monitoring to remove the fraudulent and bot traffic streaming through their pipes
- Label placements for what they actually are. If the ad is the 12th unit on a low-quality site, label it as such. There is, and will continue to be, plenty of ad-network demand for those placements. If the placement is above the fold on a pristine publisher page, label appropriately – get the real value for your inventory
- Stop hiding behind anonymous and mislabeled URLs. If you are a quality publisher, the buy side will reward you with enhanced spending
- If you are running a legitimate second price auction, let your buyers know. If you are not, be upfront about the underlying mechanisms and bias in the auction
- Stop playing zero-sum. Collaborate with your buy-side partners – this market is bigger than all of us ever dreamed it might be.
I laud the efforts of folks already working on better quality and transparency, such as AppNexus, which removed file-sharing sites and labeled its toolbar inventory, and OpenX, which implemented better and more active monitoring and controls.
However, for our market to reach the next level of maturity and net the bundle of brand and TV dollars we all dream about, the supply side needs to respond to feedback from the buy side. Then it must evolve and iterate its offerings to match those needs.