Moderator Jonathon Shaevitz opened our roundtable discussion recalling Mr. Pritchard’s demands for transparency – a rallying cry that many are happy to echo and get behind, to be sure, but what happens when we unpack this idea? What action is to be taken, and by whom? What do major brands like P&G mean by “transparency”? Who is responsible for fixing the problem? Is there true common measurement? Do we need to standardize and charge the Moats and WhiteOps of the ecosystem as the sheriffs of our (maturing) wild west?
The Prisoner’s Dilemma
Anthony Katsur, President of Sonobi, was willing to start by suggesting the problem starts with following the money in the ecosystem to the source – the brand/agency economic model. Brands are expecting cheap buys, niche audiences and high viewability, whereas agencies are incentivized to spend their client’s budget in-full and opaquely so they can deliver to some client measurement while maximizing their own returns. Others suggested that the agency/brand relationship was a big part of the opacity problem, as well-defined in the 2016 ANA report.
Others noted that the focus on audience targeting for the last 5+ years has lead to unrealistic expectations of price and value. Katsur noted that when buyers demand a specific audience, but only with the limited, white-labelled publisher list, they then complain that eCPM’s are $40 instead of the $4.00 eCPM’s they had realized with less-targeted publisher list. Mr. Katsur pressed, “We don’t price supply. There is scarcity in the Comscore 150… what we can do is quantify scarcity.” Using a whitelist (e.g., from well-ranked companies in the Comscore) solves many issues with audience and inventory quality, but scarcity –and cost– become untenable factors, and the high-quality, smaller inventory publishers with coveted niche audiences are excluded.
Mr. Shaevitz noted that while there is a clear need for brands/agencies to have some intense couples-therapy sessions, there is plenty that adTech can do outside of that holding their breath waiting for brands and agencies resolve their differences.
Trip Foster, EVP at Adomik, expanded on this idea, stating, “If there were true transparency inside the AdTech machine, it would actually cast light on that [brand/agency] relationship with a lot more clarity. [Brands] would see that on 20% of the dollars spent on media are reaching the publisher.”
Yes, there is strong evidence to support the brand/agency relationship being a major factor in waste. But the traditional pricing of adTech –where technology is bundled with media– causes obfuscation between the dollars into the ecosystem and the dollars out, and that many established companies benefit from the status quo.
As Mr. Katsur explained, “It’s the Prisoner’s Dilemma.” The market would grow if everyone was willing to share more and be transparent, but the supposition here is that neither party has the ability, or the desire, to communicate with the other. Others argued that this inability to communicate is not real – Communication is possible, and it takes the adTech industry’s leadership to change the status quo. “We [adTech vendors] can shed more light on the issue rather than waiting for the issue to be solved [at the agency/brand level],” Mr. Foster stated.
Many felt that changing the pricing model to SaaS helps resolve many problems by effectively forcing transparency on the media transactions. A SaaS pricing structure allows them to provide a transparent data set to their clients. Mike Driscoll, CEO at MetaMarkets explains, “What we found in general when we work with a marketplace…each time they increase the transparency they share with their partners, they actually see that market activity increases… transparency drives market activity.”
Publishers, Pull Yourselves Together
Stephanie Layser, Director Advertising Technology at NewsCorp., offered to the roundtable that some responsibility for the state of transparency lies with old-guard publishers. While they have always understood their users better than anyone based on their first-party data, they have been behind on putting it all together and producing products that advertisers want.
“All these problems with viewability, transparency… didn’t exist ten years ago. Before we started this adTech ecosystem there was this 1:1 relationship between the publisher and the advertiser. Then it started to be [about] targeting audiences. We wanted to look for this person wherever they are, and we don’t care about where they are on the internet, and then it became this ‘1 to Many’ [targeting]. We [publishers] could sign up for four different platforms easily. For agencies… it made it a lot easier to look in four different systems and get it all done,” she said.
Publishers often selected the easiest short term solution and did not invest in talent and technology to create differentiation. Some publishers and adTech companies also ignored the rampant growth of fraud and its impact to viewability and measurement. With the addition of fake news and entities like Methbot coming to light, the onus is also on legitimate publishers to provide transparency and real value. By using their internal resources to develop products and use adTech programmatically, publishers can deliver impressions within a better packaged framework. This will require publishers to demand transparency from their technology partners to keep the entire process open and accurate.
Transparency Now or Legislation Tomorrow
Regarding keeping the entire process open and accurate, our thoughts turn immediately to third party oversight. However, while companies such as Moat, DoubleVerify and WhiteOps all offer robust verification and protection, each is going to market with their own currency. In short, this competition to lead the industry and capture their own monopoly rent leads to some inaction and challenges with reconciliation when publisher and advertiser are using different methods and have no framework to account for discrepancies. So while no one advocated requiring some sort of universal currency for transparency, many participants recognized that the status quo, particularly with bad actors impacting the market, could lead towards government incursion.
While some agreed that this can be solved on a case by case basis between publisher and advertiser (e.g., select one shared measurement tool and go forward), others argued that a more standardized currency would benefit the overall marketplace. All agreed that confusion of measurement is limiting growth.
Further, as cookies are replaced with new tracking and targeting technology, accountability will become magnified continue to seep into the public. Building trust with transparency is a current imperative to avoid having outside entities dictate the rules of engagement. Michael Driscoll adds, “The truth is we need these guys because who else will do their work? The government?”
Using Your Head(er Bidding)
A clear trend in the industry over the past 18 months is header bidding. While the benefits of higher yield for the publisher on the same inventory are clear, it also adds data and clarity to the transaction between buyer and seller, if only as a byproduct.
Jonathon Shaevitz offered, “One of the things publishers have done poorly for the past ten years is control their data.” Where legacy SSPs made their money on each hop, members of the roundtable were quick to point out that each hop also created an opportunity for information loss and replacement with less-relevant data – and worse – false data injections, and trust was eroded.
Header bidding begins moving the needle of data control back into publishers’ hands, allowing significantly more publisher data to be transmitted, allowing the buy side to assess the quality of the environment and impressions with increased fidelity.
An increase in overall fidelity surely leads to a safer marketplace. The challenge again is to follow the money to the source. Publishers must work to present advertisers with clear value to explain why they are paying more for the same impressions.
- There is plenty of blame for industry opacity and a lack of cooperation to go around the industry, and no one at the table shied away from accepting some responsibility. Admittedly, some is simply the growing pains of a maturing industry.
- The flawed and opaque agency/brand relationship continues to play a large role in holding back transparency based on lack of communication and shared priorities
- The SaaS model is helpful in keeping AdTech’s hands clean, letting dollars pass through the ecosystem without a hidden tech tax – but who will accept the tech invoice?
- Legislative reach into the adTech industry may not too far away. Without clearer value on the publisher’s side and shared goals on the agency/brand side legislated regulation may significantly stifle innovation and evolution in AdTech.
- Light disinfects. More data leads to more transparency. Header bidding isn’t daylight, but its flashlight is a step in the right direction.
Author: Matthew Thornton