Stop Calling It an AdTech Tax

We cringe when we hear it: tax. It feels awful, it sounds unfair. But taxes are additional costs tacked onto the original service or product that often have nothing to do with the deliverables themselves.

Weather transactional fees or SaaS, our fees are necessary to leverage all the amazing stuff we do for brands, agencies, publishers… AdTech has changed the game, embraced and continues to define the digital, attention-based economy. If we allow our revenue to be thought of as a tax, we will never define our value and maximize it openly and appropriately. And what’s worse, our hard-earned dollars will continue to seem somehow an unfair burden that nobody wants to pay for.

What we need is transparency, which will allow all parties to see the real value in AdTech.

According to Advertising Age, through the massive shift of programmatic revenue the IAB estimates that less than 45 percent of revenue into the ecosystem actually reaches the publisher. The IAB also notes that, “understanding where dollars are distributed across the stack from advertisers to publishers can be quite disorienting in the current programmatic landscape.”

…Well, that’s reassuring.

What happens if we have transparency, and all sides can see what-costs-what and who was involved in delivering an ad to real eyeballs? In our last roundtable, we quoted Mike Driscoll, CEO of MetaMarkets when working 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.”

What happens when a marketplace is transparent?

  • Advertisers have the opportunity to spend their money more effectively
  • Advertisers have a POV from which to understand audience scarcity and understand the higher eCPMs for that audience
  • Publishers can stand behind the costs for reaching their high-value audiences
  • Publishers have the opportunity increase their revenue by selling smarter
  • AdTech can evolve to a more competitive ecosystem

The IAB agrees – and have essentially put their foot down by creating the Programmatic Fee Transparency Project. The initiative, led by Carl Kalapesi, VP-industry initiative at IAB, recognizes the lack of transparency that has undermined trust and liquidity in the marketplace, vowing “The IAB Programmatic Fee Transparency Project will develop guidance around fee disclosure and transparency within the programmatic ecosystem.”

Opacity is ultimately wasteful and counterproductive – we all know that trust builds lasting relationships. We will continue to deliver, innovate, and monetize our work, but our revenue is based on direct results. The first step in transparency is not calling our revenue something it isn’t.

So don’t call it a tax.

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Author: Ayla Quinn

Posted in AdTech Ecosystem, Round Table, Thought-leadership and tagged .