Content Roundup: More Isn’t Merrier — AdTech Flotilla — Google’s € Bill

Here’s some of our fav MadTech news from June:  Will pubs keep winning in the header bidding game? (Catch up our Header Bidding Roundtable here) – The Tech Armada  – Google’s Euro Fines – Two Retail Giants do Battle…

Anything juicy we missed? Tell us on Twitter, Facebook… or button it up on LinkedIn.

More Isn’t Merrier: Redundant Header Bidders Are Destabilizing The Drum, Jun. 27, 2017

Pubs love header bidding, but now pubs have an average of 10 header bidders…
#HeaderBidding #Pubs

Google Hit With Record EU Fine BBC News, Jun. 27, 2017
Google Shopping may account for 74% of all retail-related ads clicked on its SERPs. Will Google make changes or pay $14M a day?
#International #Search #Financial

Walmart Telling Vendors to Stop Using Amazon’s Cloud Business Insider, Jun. 22, 2017
With Amazon’s purchase of Whole Foods and Walmart’s purchases of Jet.com, Modcloth, and Bonobos – the war is officially on.
#ECommerce #Retail #Showtime

Top 6 AdTech Companies to Watch in 2017 Entrepreneur, Jun. 16, 2017
Advertising trends tend to be short-lived…will these six companies have red-letter years?
#Madtech #OnesToWatch

Cannes Briefing: The Battle Of The Ad Tech Yachts Digiday, Jun. 20, 2017
You may have missed being there, but you don’t need to miss the yacht LUMAcape.
#MadTechFlotilla #Cannes17 #OverdoingIt

 

UPCOMING INDUSTRY EVENTS

July 5 – 9  /  Apple WWDC, San Jose, CA

July 10 – 14  /  Esri User Conference, San Diego, CA

July 17 – 18  /  Digital Publishing Innovation Summit, New York, NY

July 23 – 25 /  MMA Mobile CEO Summit, Napa, CA

 

Header Bidding: 5 Videos, 8 Numbers, and 12 Remarks You Should Read

The Industry Index Header Bidding Roundtable Roundup

Every month, Industry Index gathers MadTech leaders to discuss trends, hot topics, and new technology in the industry. We’ve written recently about Header Bidding (see the exchange shakeup and winners and losers) and that was before we decided to to open it up to some key industry players at our recent Roundtable to sort out where it’s all, er…. Headed.

Here We Go…
Header bidding is not a brand new idea, But from all the chatter, it sure seems like it.  Kelvin Pichardo, Director, Product Marketing at PubMatic, thinks the growth is directly related to the functions that header bidding enables, more so than the mechanics behind having a tag in the header. He was kind/smart enough to break it down for us:

The Complexity Is Simple.
Header bidding exposes all inventory to a large cross section of demand simultaneously, and more competition has improved CPMs. But with demand comes a huge pile of problems additional complexities. Latency, cookie syncing… along with the simple complexity of deploying a header bidding solution.

 

Browser-Bashing
According to Maggie Neuwald, VP, Enterprise Accounts at MediaMath, “With browser-side, there is a limitation of the number of calls and, due to second price auctions, it isn’t a unified market.” Yes, browser-based solutions afford publishers a significant level of control, but the highest bids don’t always win thanks to inefficiencies found in putting the auction load on users’ browsers.

What’s interesting is the effect that users are unaware they have in header bidding auctions, as calls are originating from their machines. Doug Lauretano, SVP and GM at Media.net stresses that these are individual calls happening to individual demand sources. “We threw out the word latency…  browsers weren’t made to operate like this. Browsers were made to show content to users – not to do these complicated AdTech calls. Hence the shift – that’s why server-side is important.”

There Is No “I” in Header Bidding
Header bidding cannot be viewed as a, “set it and forget it philosophy,” offered Michael Hannon, VP, Yield and Revenue Optimization at Purch. There needs to be total transparency when it comes to pageviews, bounce rates, demand sources, DFP, and pulling relic data on a daily basis. There should be a proactive acknowledgment of the responsibility that publishers have in implementing header bidding. Stephanie Layser, Director, Advertising Technology at News Corp stated that, “For too long we have been looking at engineering and page experience separately from advertising, and that’s where we have gotten ourselves into a lot of issues. If we start looking at ourselves – on a daily basis – holistically, and getting our teams working closer together, there will be better communication.”

You Lose, SSPs
The consensus from all participants was that SSPs have lost. It will be more than a challenge as they try to differentiate themselves with the supply amongst publishers looking exactly the same from one to another. First “latency” was a trigger word, then “commodity”… SSPs could have used a safeword…

Layser was the first to be predictive: “There is inefficiency in [browser-based] header bidding. I also believe that once you move to server-side header bidding that the SSP model collapses — but I believe that people will have one partner that will have direct integration with different DSPs. But the question is — people used to use one or two SSPs anyways, so are we just collapsing back to just one SSP? I don’t know exactly what it is. I tend to hope that the future has less to do with getting demand from other people and using their third party demand, and  more of it has to do with utilizing publishers first-party demand and the relationship that they have with their users.”

 

Big Cookies
Moderator Jonathon Shaevitz addressed that we cannot have a header bidding conversation without putting Google… (and Whole Foods Amazon) in the middle. The room chattered with recognition, and after a brief pause and some darting eyes across the table, he then noted that Facebook also has to be included to ensure that the conversation stays proactive. More darting eyes. More nodding.

Neuwald stated that when working with a variety of DMPs, there is a loss of data that is related specifically to cross-device, person-based identification… that’s the information of true value. Ahem. Layser added, “The biggest value is the ID, knowing that this is an addressable person. That is the greatest value that they (Google, Amazon, Facebook) can identify and the smaller guys don’t have that as much.”

It seems that the tri-opolies (you read that right) may always be at the forefront of MadTech. This comes up at every single Roundtable, and Layser gets the credit for this field goal: “Everyone’s digital ad growth is 1%, where Google and Facebook is around 40-50%.” Boom goes the dynamite.

I Might Like You Better If We Tech Together…
Data is important, but doesn’t mean anything without cookie matching. Megan Latham, Global Head of Advertising Operations at Bloomberg believes that cookie matching across platforms needs to be addressed and implemented.

Neuwald adds that, “The only limitation is just cookie matching and we see up to 90% matches with our partners… so it’s something that is easily solved. It just requires standards, transparency, trust, and some coopetition (you read that right, too), which this industry is luckily good at. But we need to up the ante on people-based identifiers, and this is a long term strategy.”

 

By the Numbers
Participants were asked to pick a number, any number, they deemed relevant to the current state of header bidding. Here are the highlights… make sure you give proper attribution as you throw these one-liners out at your 4th of July barbeque:

  • “Every 1 second delay in a page load can result in a 7% decline in sales – per second – and 16% decline in consumer experience.” — Maggie Neuwald
  • “Marketers who have adopted a full-funnel approach have seen a 532% ROI increase, based on a Forester Economic Impact Study.” — Maggie Neuwald
  • “There are between 4-6 million queries per second that some DSPs listen to.” — Ari Paparo
  • “When you think that header bidding hit a tipping point about 2 years ago, and the amount of traction it’s gotten, across all forms… it’s really upended an industry in 2 years. Makes you wonder what the next 2 years will look like.” — Doug Lauretano
  • “On average, 385 individual calls are needed to load a single page (of a sample of about 20 different premium publishers’ websites.) That includes images, text… everything.” Doug Lauretano
  • 13% of impressions go to the private auction space. This needs to grow to bridge the gap between the publisher and the buy-side to pull the buyer’s further up the yield curve.” — Matthew Lehman
  • “$45.9 billion is predicted to be spent in programmatic display by 2019, and will count for 84% of US display revenue, which shows why there are 636 vendors out there – because the money is being generated and people are jumping on the wagon.” — Megan Latham

We Don’t Need No Stinking Badges…
Our Roundtable was certain about one thing: Header bidding (despite the valiant efforts of the Roundtable) is still complex, and still evolving. We managed to scratch the surface together, but left a few things on the table. One thing that wasn’t addressed: AdWeek recently reported, ”The IAB Tech Lab announced an initial outline for what it’s calling ‘Standard Header Container Integration with an Ad Server,’ a nine-page document from the Header Tag Task Force.” (Emphasis ours.) Seriously… we hope they get uniforms and badges. That’s our prediction, anyway.


The Header Bidding Crystal Ball


Have a Great Summer, Don’t Ever Change…
July is a big deal at Industry Index — We’re launching our new site, working on some top-secret- amazing, and planning our next Roundtable for September. Want to know when all these things are happening? Sign up on our mailing list, and follow us on LinkedIn and Twitter.

Header Bidding: Threat or Savior?

HEADER BIDDING: WINNERS AND LOSERS
Header bidding is washing over the AdTech ecosystem faster than any other tech, leveling the playing field between pubs and exchanges. Need the basics? Read these primers from Digiday and Adprofs, or our recent blog, for a quick history.

Adoption rates among US publishers are incredibly high – reportedly at 70%+. Big numbers – who are the winners and losers?

WINNER — PUBLISHERS
Header bidding is exploding because publishers reason (often correctly) that they are getting screwed by the second price auction and the intermediaries who may be rigging the system. Via header bidding, publishers are able to bypass the waterfall of exchanges, which increases overall eCPMs, provides more control over inventory, and relegates exchange(s) – mostly AdX – to sell “remnant”.  

Though there is some disagreement on the stats, header bidding on guaranteed inventory has increased eCPMs by at least 20%. For non-guaranteed inventory, header bidding has seen a 50% increase.

There are two reasons for this, with equal weighting:

  1. Header bidding exposes ALL inventory to bidders, rather than restricting visibility to unsold/remnant/low priority — high-value inventory competes with guaranteed demand.
  2. Bids through the header are passed from DFP to AdX, creating floor pricing. This increases eCPMs for AdX-sold inventory.

LOSER – PRIMARY EXCHANGES
Exchanges are struggling to catch up as win rates decline through increased competition. One needs look no further than the recent stock price collapse of Rubicon, who reported that header bidding is the primary culprit in their recent earnings calls (and which resulted in hiring Michael Barrett, a consistently successful CEO with outstanding reputation of selling the companies he walks into.)

PubMatic was also late to the game, resulting in a lull – though they have recently joined the fray and are appearing to be gaining momentum.

AdX, the largest of the primaries, is certainly a short-term loser, at least. Due to the new floors header bidding has created, AdX is able to sell inventory at a higher price. However, the volume of quality inventory has dropped, with the best inventory being snatched-up quickly in the header bidding cycle.

Then there’s Google… who I would never count out. While their response is developing, header bidding is also threatening their core ad-server dominance. But, Google is encouraging publishers to explore competitive ad-servers that have built-in programmatic capabilities, as opposed to DFP, in which the exchanges are separate systems.  

AppNexus seems to have woken up with their open source solution, prebid.org, but it’s too early to be certain how they will factor long-term, although they are clearly gaining steam.

WINNER — SECONDARY EXCHANGES
Secondary and tertiary SSPs/Exchanges – traditionally the third, fourth, or fifth calls on the remnant inventory chain – were used to seeing inventory picked-over by AdX, AppNexus, Rubicon… Thanks to header bidding, these smaller SSPs and exchanges can offer the same inventory, at the same time, as the big exchanges, and compete on price and service. Now, it’s the biggest exchanges (with the noted exception of AppNexus) who are scrambling to catch up.

Certain other exchanges, in particular OpenX and Index Exchange, made big bets early on in the header bidding model. SOVRN has also fared well through this upheaval. SOVRN sees 100% of a given publisher’s inventory, and their volumes and eCPMs have increased. And yes, they also incur ‘listing fees’ for 100% of the inventory — but the top line is exploding.

WINNER — DSPs
While they encounter significantly higher listening costs to manage the huge volume of increased impressions, DSP’s now see all of a publisher’s inventory. This visibility includes the most valuable impressions, driving up CPMs and overall sales, even as win rates are lower due to the massive amount of visible inventory.

LOSER – NETWORKS
Networks have been in decline for many years – header bidding is not a single, fatal blow. What’s more: a number of networks are still competing successfully, both integrating inventory into exchanges and leveraging data.  

However, header bidding is going to ultimately subsume what is left of the network marketplace. Some will emerge stronger by managing header bidding solutions for smaller publishers, but those who are primarily aggregating inventory will likely be destroyed.  

THE BIG QUESTION
How will the emergence of server-to-server header bidding impact the adTech landscape?

Short term, it appears to not only help publishers, but also favor smaller exchanges.  

Server-to-server header bidding is, essentially, a publisher selecting one exchange and giving that exchange all of their inventory. The publisher is then not only seeing the “unsold,” but 100% of the inventory (like all header bidding). However by doing so publishers are opening themselves up to many of the same transparency problems of yesterday’s exchanges. Plus, cookie-syncing issues are emerging with server-to-server solutions (not to worry here – these issues will be fixed.)

The biggest publishers with the highest-quality inventory don’t need an exchange. Companies like Purch have already tackled this, and we are seeing the emergence of other companies stepping unto the breach to support publishers, deploying their own server-to-server solution.  

I suspect the biggest and best publishers, used to working with a healthy percentage of media spend, will migrate to a fully-transparent server-to-server model. This will force the exchanges to become more transparent, change their pricing, and provide different levels of service. Publishers will jointly create a cookie-syncing solution, and eventually attract the largest DSPs to bid directly – nary an exchange in sight.   

Exchanges will be forced to provide their services to the mid- and long-tail. While some may survive, many will fail. The exchanges who do survive will likely be those already focussed on the long tail (think: SOVRN) versus those competing for the comScore 200.  

I am left with the thought that perhaps the exchanges and SSPs will (ultimately) win — in the short term with all publishers, but in the long term, perhaps only with smaller publishers. There are many exchanges – some are focussed on a more vertical approach (think: mobile or video) and others on providing higher-quality service, trying to differentiate themselves in other ways. What’s more: The biggest exchanges have always been “display first,” and their business models will come under increased pressure as header bidding tech becomes more ubiquitous.

Plus, we cannot overlook the benefits of deploying one’s own solution, extending further into the market.

ONE STEP AT A TIME
Sure, header bidding doesn’t fix many of the other problems with the programmatic marketplace (fraud, walled gardens, viewability, effectiveness…) but this shift is returning some pricing power back to independent publishers.

That can only be good for the industry.

…WE’RE JUST GETTING STARTED
Industry Index is exploring server-to-server v. browser-based header bidding solutions at our upcoming Roundtable, with some of the smartest names in the field. Jonathon Shaevitz will moderate. Get your tickets here.

Content Roundup: Chicken nuggets, Google gets a cold shower, Rubicon’s FastLane

In case you missed it, here are our staff’s fav MadTech news picks from the last two weeks. Notice something new? #Hashtags! We want to know what you’ve been reading, and what we missed. Tell us on Twitter, Facebook… or button it up on LinkedIn.  

In case you missed it 2x, here’s our previous Roundup (#redundant).

 

 

News Corp & Unruly seeking to redefine programmatic through new private marketplacesThe Drum, Apr. 10, 2017
Media buyers can now buy inventory that matches a person’s mood…
#emerging #programmatic #partnership

How The NYT, CNN, and HuffPo approach publishing on platformsNieman Lab, Mar. 30, 2017
A study from Columbia University examines how social platforms have changed journalism.
#publishing #study #social

Rubicon Project Announces Early Successes from Video Header Bidding BetaYahoo Finance, Apr. 6, 2017
The Exchange announced the initial results experienced by publishers using its video header bidding product…
#beta #emerging #programmatic

Diana Ionel, Starcom Romania: “The cold shower for Google is a good thing…”iCEE.news, Mar. 30, 2017
“No matter how sophisticated targeting is right now, the association with quality content involves a judgment on that content…”
#content #international

The Kendall Jenner Pepsi Creative BriefMedium, Apr. 6, 2017
This parody brief for Pepsi’s massive tone-deafness is right on the nose… 
#blowingIt #pepsi

World record for retweets could be broken over some free chicken nuggets The Verge, Apr. 6, 2017
A social media win for Wendy’s. Are you in one of the 2.7 million retweets?
#NuggsForCarter

 

UPCOMING INDUSTRY EVENTS

April 19 – 20  /  Conversion Conference, Las Vegas, NV

April 23 – 26  /  Marketing Nation Summit, San Francisco, CA

April 25  /  Empire Startups FinTech Conference, New York, NY

April 26  /  Influencer Marketing Roundtable, New York, NY

 

(Join in! Tweet us or tell us on LinkedIn of some media that you think is worth sharing.)

You Can’t Spell Exchange without Change

HEADER BIDDING IS LEVELING THE PLAYING FIELD BETWEEN PUBLISHERS AND EXCHANGES

Header Bidding – the new black, taking the market by storm, the must have, top of the trends.

So why is it such a threat?

Header bidding shifts the power dynamic away from the SSPs and exchanges, moving it back to the publishers. Publishers who manage their own header bidding have created what exchanges promised to create for the last five years: a highly competitive auction for a publisher’s inventory. Not only are publishers making more money with header bidding, they are gaining a bigger advantage, transparency of demand, and inventory control.  

Who is winning – and who is losing – thanks to header bidding? Why do I believe it ultimately spells the demise of many exchanges?

THE QUICK HISTORY:

  1. Digital advertising was born.
  2. Digital advertising was sold much like TV, print and radio, mostly on a guaranteed basis via phone calls, faxes and emails.
  3. Digital inventory exploded and “remnant” (unsold) was born.  
  4. Remnant was sold via networks, used for house ads, or went unsold.  
  5. Networks figured out how to create vertical networks and other aggregation methods, providing reach and contextual targeting to buyers.
  6. Networks started deploying audience targeting tools and were the first to really leverage data (with the exception of Google, who always knew how to leverage data).
  7. DMPs and other data companies emerged, created huge pools of profiled cookies.
  8. SSPs, Exchanges, and DSPs emerged to create the ability to “real time target and bid” on remnant inventory.
  9. DSPs leveraged the audience data to drive performance and the size of the RTB market exploded.
  10. Publishers were pushed to “be transparent” with their inventory and add higher quality inventory to what was sold programmatically, increasing eCPMs of exchange inventory, but not necessary the overall eCPM of publishers.
  11. Exchanges, and DSPs starting making some serious money (each taking about 15% of the spend) creating the so called “AdTech Tax.”  
  12. Meanwhile, companies like Criteo realized that being in the header gave them first look for all inventory (not just unsold), driving up eCPMs for publishers while cherry-picking inventory.
  13. Technology-learning publishers began to experiment with “header bidding,” often leveraging DFPs’ dynamic allocation tools.
  14. Open source header bidding wrappers and adapters became available and the market exploded.
  15. Header bidding began driving up CPMs for publishers, allowing them to capture top dollar for high-value inventory.

 

Header bidding is exploding because publishers reason (often correctly) that they are getting screwed by the second price auction and the intermediaries who seem to be rigging the system. With header bidding, publishers are able to bypass the the waterfall of exchanges, increase their overall eCPMs, gain more control of their inventory and only use their exchange(s) (mostly AdX) to sell what is truly now “remnant”.  

Why are the exchanges doomed? First, they’re not all screwed. Some were losing under the “exchange daisy chain market.”  They were the third, fourth, or fifth call on the chain and saw lousy inventory that had been picked over by AdX, AppNexus, Rubicon… Certain companies, in particular OpenX and Index Exchange, made early big bets on the header bidding model.  All of a sudden, they were seeing 100% of a given publisher’s inventory, and their volumes and eCPMs increased. (Yes, they also incurred a “listening fee” for 100% of the inventory, but top line exploded.) AppNexus jumped on the bandwagon a little later, with their open source solution, prebid.org. However Rubicon was late to the party, as was Pubmatic.  

Rubicon has reported header bidding as the primary culprit in their recent earnings calls. One need look no further than the recent stock price collapse of Rubicon. It has been blaming header bidding for its sinking performance for the last few quarters, but was overwhelmed with bad news with its recent reporting (which resulted in hiring Michael Barrett, a consistently successful CEO (successful at selling the companies he walks into).

Most importantly, publishers, particularly the comScore 150, were figuring out how this was all working, and began taking control of the process. Now everyone is talking about server-to-server integration for header bidding. This seems to overcome the real technology problems of header bidding by creating a single header bidding call and having someone else then manage the bidding process. Usually this “someone else” is the exchange. They have the technology infrastructure needed to manage the extraordinary volume created by this system.  

Server-to-server also creates a new problem related to cookie matching, but let’s assume this will get resolved over time. The biggest part of the challenge is exchanges’ unwillingness to cookie sync.  

Shenanigans, deception, and more of the same-old-same-old.  

While server-to-server integration clearly solves most of the problems associated with the speed and load times of header bidding, it leaves publishers exposed to different problems.  One traditional complaint of publishers regarding exchanges was that the actual fees charged by such intermediaries were less than transparent. Also, publishers suspected that, in some cases, exchanges were front running their inventory, creating additional spread within auctions, adding or subtracting data for their own benefit. Publishers felt cheated, but were not certain whether it was true.  

Over the last few years, as more bid stream data has become available, these suspicions have sometimes been confirmed. Certainly, some deceptive practices have been identified.  As with most things, transparency is the greatest disinfectant.  

The problem with header bidding managed by the exchange is that it opens the ecosystem back up to the suspicions of self dealing. In one instance recounted by multiple publishers, some exchanges seemed to win a disproportionate amount of inventory when they were the “wrapper” compared to when they were only an “adapter” inside someone else’s wrapper (i.e., when they manage the whole auction they win too much, compared to when they are just another bidder).

Simply put, server-to-server, at least as most people are discussing, is basically a publisher selecting one exchange and giving them all their inventory. Now they are not just seeing the “unsold,” but 100% of the inventory (like all header-bidding). However publishers are opening themselves up to many of the same transparency problems of yesterday’s exchanges.

Why is this a threat to the exchanges? Simple – the biggest publishers with the highest quality inventory don’t need to use an exchange. Companies like Purch have already tackled this themselves, and we are seeing the emergence of other companies stepping into the breach to either support publishers deploying their own server-to-server deployment, or creating new pricing models so they do not have an incentive to play with the auction.  

I suspect the biggest and best publishers will migrate to a fully-transparent server-to-server model, which will force the exchanges (who are used to working of a healthy percentage of the media spend) to become more transparent, change their pricing, and provide different levels of service. Publishers will jointly create a cookie-syncing solution, and eventually attract the largest DSPs to bid directly, and not through an exchange at all.  

Exchanges will be forced to provide their services to the mid- and long-tail. While some can survive, many will fail. The winners will likely be the exchanges already focussed on the long tail (think SOVRN) versus those competing for the comScore 150.  

There are many exchanges in the market, some focused on a more vertical approach (think mobile or video) and others providing higher-quality service and trying to differentiate in other ways. However, the biggest exchanges were and are “display first,” and their business models will come under increasing pressure as header bidding technologies become more ubiquitous, and as the expertise to deploy one’s own solution extends further into the market.

These trends don’t fix many of the other problems with the programmatic marketplace (fraud, walled gardens, viewability, effectiveness…) but this shift is going to return some of the pricing power back to independent publishers. That can only be good for the industry.

Roundtable Round-Up: Ad Transparency, Measurement & Viewability

Industry Index Roundtable 02-22-17

IT was only a matter of time. Marc Pritchard, P&G’s global chief brand officer, delivered the adTech industry at large a mandate on media transparency at the iAB Annual Leadership Meeting in January.

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.

Getting SaaSy

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.

Takeaways

  • 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.

 

 

Participants

Seho Lee, VP Programmatic Sales at Unruly

Jeremy Zeleznock, VP of Strategy at Genesis Media

Trip Foster, EVP of Revenue at Adomik

Stephanie Layser, Director Advertising Technology at NewsCorp.

Chris Smith, Founder & CEO at Stitch Video

Corey Kronengold, CMO at Smart AdServer

Anthony Katsur, President at Sonobi

Mike Driscoll, CEO at MetaMarkets

 

Moderator:

Jonathon Shaevitz, CEO at Industry Index

 

 

 

Post-cookie era coming?

Media We Like: “Post-Cookie Era Coming”

Here come the I.I. team’s picks for the week. This week, it’s (again) the end of cookie measurement. Is it for real this time? Both Facebook and Snapchat are the new TV. And TripleLift introduces a — wait for it — first price auction. (See our roundup of 2017 MadTech trends here.)

A view of the post-cookie measurement battleground (Digiday) – Jan. 18, 2017
Identity measurement is hot in online advertising, again. “It’s the beginning of the post-cookie ecosystem,” with GroupM joining this field where Google and Facebook currently dominate.

The Evolution of Data Journalism (The Content Strategist) – Jan. 17, 2017
For content, data work.

Ad Viewability is All Wrong: Double Standards Create Lack of Consistency (ExchangeWire) – Feb. 8, 2017
Currency has switched from a served impression to a viewable impression. But there are various standards floating and publishers are scrambling to redesign their ad space to maximize viewability.

The Radical Future Of Branding (Co.Design) – Feb. 2, 2017
Conventional wisdom has it that brands shouldn’t talk politics. Why risk alienating potential customers? That was before Donald Trump.

Facebook Steers Publishers To Long-Form Video (MediaPost) – Jan. 17, 2017
Facebook is encouraging its publishing partners to move away from live streaming video in favor of producing more long-form video, as it is poised to introduce new mid-roll video ad products. Oh, and have you heard that “Snapchat is the new TV?” (WSJ, Feb. 5.)

TripleLift Builds Server-Side Header Bidding For Native Ads (AdExchanger) – Feb. 7, 2017
TripleLift will run a first-price auction among all participating partners, a shift from the OpenRTB spec of a second-price auction. The move could result in higher payouts for publishers.

(Join in! Tweet us or tell us on LinkedIn of some media that you think is worth sharing.)

The Year Header Bidding Went Mainstream

Media We Like: “Header Bidding & Consolidation: 2016 MadTech Recap”

This week, the I.I. team brings our collection of 2016 recaps in MarTech and AdTech. What is going to happen in 2017? Stay tuned next week.  (See our previous headline roundup here.)

Digital advertising: Where we are now and where we’re headed (The Drum) – Dec. 15, 2016
There’s one theme that unifies much of what happened in ad tech over the past year: change. Header bidding was, without a doubt, the top trend of the year. And other keywords are video and consolidation.

The Year Header Bidding Went Mainstream (AdExchanger) – Dec 27, 2016
A timeline listing what the major players did in each month.

M&A 2016: The Year Ad Tech Cautiously Rose Again (AdExchanger) – Dec. 30, 2016
Ad tech M&A has been a roller coaster in recent years, and 2016 certainly didn’t let up. In 2015, public and private marketplace sentiment cooled, but 2016 saw a resurgence – albeit a much more cautious one than in years past.

Why 2016 Was The Beginning of The End of The Current Ad Tech Cycle (ExchangeWire) – Dec. 23, 2016
There is a sense in the industry that there needs to be a ‘clear out’ of the current crop of programmatic vendors – beginning from Adobe’s acquisition of TubeMogul to the coming AppNexus IPO.

The Year in Technology: 2016 in Charts (Bloomberg Gadfly) – Dec 30, 2016
Advertising becomes a two-horse race as Google and Facebook accounted for 58% US digital ad revenue in 2016.

10 Media and Advertising Predictions That Didn’t Come True in 2016 (The Wall Street Journal) – Dec 29, 2016
Things that didn’t happen like “the ad tech sector would be decimated”; “TV advertising, like it always had, would help decide the election”; and “media metrics would get solved.”

(Join in! Tweet us or tell us on LinkedIn some media of interest that you think is worth sharing.)

Image Source: AdExchanger