Ad Tech's QAG-mire

The Interactive Advertising Bureau (IAB) certified 29 companies under its Quality Assurance Guidelines (QAG) program on Tuesday, but the ad tech industry still has a ways to go before the mission is accomplished. With that being said, it appears on track, and has set itself up well to prove that ad quality on programmatic exchanges can truly improve.

I spoke with Walter Knapp, CEO of sovrn, which was one of the 29 companies certified under QAG 2.0, about the program and why I think we shouldn’t be so quick to celebrate. Yes, the certifications are a way of arming the ad tech industry, but the proverbial war isn’t over. Little progress seems to have been made in the past six months with regard to ad quality.

For example, Integral Ad Science last week released its Q1 2014 report. The company gives “true advertising quality” scores for online ad impressions based on fraud, viewability, brand safety and other variables. The “true advertising quality” of impressions trade via exchanges actually decreased from Q4 2013 to Q1 2014. It wasn’t a major decrease, but that only makes it less bad.

Similarly, digital video ad platform Vindico released a report two weeks ago asserting that 50% of inventory from ad nets and exchanges are worthy of ‘D’ or ‘F’ grades, meaning the impressions were likely not in-view or alongside inappropriate content.

We are on round two of QAG -- a self-regulated program consisting of buyers and sellers meant to ensure ad quality -- but we still see paltry viewability rates of 50%, and that’s with the upsettingly low standard of 50% of the ad being in-view for at least one second.

“I think that -- at a macro level -- what you described is a logical hypothesis,” Knapp said. “It doesn’t seem like a lot is occurring, and at a macro level you might be right.”

But Knapp pointed out that bigger supply-side companies, which is where sovrn is, more or less have the same ad tech stacks. So the way they differentiate themselves is by dealing with topics such as ad fraud and viewability uniquely.

“If you look at individual companies from that angle, you’ll see a tremendous amount happening,” Knapp asserted.

And the “tremendous amount” that’s happening is having a noted impact on those supply-side companies, according to Knapp.

“We’ve made a massive investment this year, in terms of actual money invested as well as in purging revenues from questionable quality and/or suspicious traffic,” Knapp shared. “We are talking about tens of millions of dollars.”

Knapp said he knows other companies on the supply-side that are making similar moves to sovrn when it comes to combating fraud, and while he doesn’t know how much of a financial impact it’s having on those other companies, he’s confident it’s substantial.

The financial (and time-consuming) hit to combat fraud and poor ad quality is part of a long-term vision, per Knapp. Plus, supply-side players are making the moves because the buy-side is asking about it -- and even buying based on it.

In just the past few months, we’ve seen Integral announce it will let companies buy ads based on its “true advertising quality” scores. Several in the space now also offer pay-per-viewable-impression packages backed by the Media Rating Council. And as we saw Tuesday, the IAB is moving forward with its focus on ad quality on programmatic exchanges.

“I talk with folks that are at large agencies and trading desks, and even from brands themselves, and over the last several months they’ve started to ask the hard questions,” Knapp said. “‘How can I know that my ads are being seen? How can I know that I’m not spending money on robots? Etc.’ When the buyer starts asking those questions, and forcing the trading desks and demand-side platforms (DSPs) to be able to answer, we have a full ecosystem taking the problem seriously. I think that’s going to start happening with increasing volume.”

It better, or else we will look back at these guidelines and lifted advisories and wonder why they didn't help ad tech out of its quagmire.

But Knapp sounded genuinely confident that quantifiable progress was on the horizon. It's clear the ad tech industry has done well in its preparation -- particularly in the past few months -- but now it's time to see it all in action.

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