Transparency Versus Control: Which Matters More in Network Buys?

"Networking" is a new column focused on the evolving roles of networks in online advertising.

Today's column is written by Alan Schanzer, Chief Strategy Officer of Undertone Networks.

networkingOver the last several months there have been numerous reports about fraud impacting all facets of the online advertising industry – publishers, networks, agencies – and ultimately, brand marketers.

These shady practices run the gamut from the "sub-optimal" (stacked ads or incentivized clicks, from which no advertiser really benefits) to misleading (the common practice of URL padding) to the downright fraudulent —from organized click fraud to serving invisible impressions. Now, not only do marketers and agencies have to be increasingly careful about selecting their media partners, fundamental metrics like impressions and clicks need to be monitored closely for efficacy and performance.

The industry often turns to "transparency" for reassurance that a marketer is actually getting what they pay for. This is an especially sensitive hot-button for advertisers when dealing with ad networks. Media buyers look to ad networks for reach and scale, and for targeting and efficiency. But the reach and scale comes with a cautionary flag: what sites will my ads run on, exactly? How do I know you’ll be serving my ads in brand-safe environments?

That uncertainty precipitates the call for transparency, which in most cases, simply translates to nothing more than a site list from the ad network. Unfortunately, a site list alone will not protect your brand.

When selecting a network, business practice transparency is far more important that site transparency.

For example, a network may provide some level of transparency by providing the advertiser with the comScore top 250 site list. The cautious buyer is appeased, the plan is approved, and the campaign is off and running. But access to a site list doesn’t protect the brand from two misrepresentative practices: URL padding and/or daisy chaining.

With URL padding, the ads may be served only on a small subset of the published site list, either because that is the only inventory available or that is the inventory that the negotiated rates permit. So despite a site list that claims the comScore top 250, the campaign might have 90+percent of its impressions delivered on just six sites. Not quite the diversity a media planner looks for in a network buy.

The second practice, daisy chaining, can also have undesired repercussions. When daisy-chaining occurs, the flow is as follows: an advertiser signs an agreement with Network A. Before or while the campaign is live, Networks A engages Network B who engages Network C and so on and so forth. This can represent a significant problem for the advertiser who contracted with Network A. No matter what site list they may have provided during the media planning process, if Network A re-brokers – or daisy chains – the inventory, they’ve lost complete control of where the ads run. In the recent Mpire study, the firm executed 11 buys on 9 networks and one exchange. Mpire found that the downstream fulfillment was done on nearly 50 networks – and that the ads were served on more than 100,000 websites. That represents a complete loss of control for the advertiser.

While most networks have a policy around site transparency, its purpose should be based on establishing site exceptions to protect the direct sales channel. Networks provide incredible value when it comes to reach, efficiency, innovation, targeting, and results. Publishers provide deep connections with core consumers and great content. The two can and should work seamlessly together in a media plan.

When a network is transparent with its business practices, marketers not only gain insight into their inventory acquisition model and impression distribution policies, they can ascertain if the network participates in secondary/re-brokered markets. Understanding these business practices will give advertisers a more meaningful view of when, where and how their ads will appear.

Agencies and marketers can protect themselves by modifying the terms and conditions on media contracts. These amendments will often exclude incentivized traffic, use of ad exchange inventory, as well as prohibit questionable business practices like ad stacking, URL padding and daisy-chaining.

Protect your brands by demanding transparency of business process. Understand how your vendor engages in the marketplace. These simple precautions can put control back in the hands of the advertiser. Don’t settle for less.

Follow Undertone Networks (@UndertoneNet) and AdExchanger.com (@adexchanger) on Twitter.

3 Comments

  1. Just to preface this comment, I have worked with the top 20 major ad networks out there. I think that you address some great issues here, but I do have one question in response to this excerpt:

    Agencies and marketers can protect themselves by modifying the terms and conditions on media contracts. These amendments will often exclude incentivized traffic, use of ad exchange inventory, as well as prohibit questionable business practices like ad stacking, URL padding and daisy-chaining.

    How does an advertiser verify that these amendments to the T's and C's are being upheld on a RON buy with a network of 100K publisher partners? Do we just take an ad networks word for it?

    Reply
    • Alan Schanzer

      Richard

      Great question and thank you for reading my article. There is no silver bullet to knowing that (any) contracted media is delivered as contracted under your T&C's. The Undertone recommendation is that you start by working with trusted partners that demonstrate a commitment to high quality business practices. Next, consider options for verification and monitoring either through watching ad serving data closely or via the many 3rd party verification systems that are emerging on the marketplace. Finally, if it seems to good to be true, it may be. No one entity can effectively monitor placements when 1000's of sites are involved. For more information, pleased see our recent webex covering the issues of fraud and misleading practices at http://www.undertone.com/clickfraudwebinar/

      Thanks - Alan

      Reply

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