Measurement is an enigma in online advertising. While online metrics have comScore numbers, ad analytics, attribution models and lift studies, they don’t measure the quality of digital media or attempt to differentiate one impression from the next.
Because media is increasingly bought and sold in real-time through ad exchanges, ad buyers and sellers cannot differentiate against the mass media of ads coming from the segment.
Josh Dreller at Fuor Digital, a digital media agency, explains it best: “Brands are engaged in operational decisions. Their concerns include the price of corn, the negative PR blitz over their stock returns, or the political instability in key factory line countries. They don’t vet shiny new objects brought by the online team, which can be less than 10% of the ad budget. It takes time to build credibility and momentum.”
Too Many Impressions
There are far more impressions than what ad buyers can handle, or will ever have the budget to buy. Within exchanges, the impressions with value (viewable placements, quality brand-safe sites, strong audience affinities) are few and far between. It is now a quantity game that drives down CPMs. Technology could solve current problems -- glut of useless inventory, unsavory web sites, etc.
However, technology handles only so much, and the volume of inventory available magnifies the chance of slipping -- and single slips can kill campaigns and drag the whole industry down.
Ask the ad buyer who has to explain to the brand why their content appeared next to porn. Further, algorithms tuned too tight to weed out the waste may miss valuable impressions. If the industry can’t account for how the impression occurs, there is no transparency, no standards, and no quality.
Along Came QPS
Exchanges and real-time bidding (RTB) grew because big brands want quality at scale. Along the way, exchanges and the ad buyers wading through them (DSPs and agency trading desks) needed to make sense of the inventory. QPS (queries per second) emerged as a figure of choice for industry insiders. It shows that you can get ad calls out, or accept ad calls, by the thousands every second--a measurement all about scale.
The industry, now sitting at 120,000 QPS, makes it a battle of throughput -- but what does that really mean? Brands don’t want impressions that nobody sees. If the sell side wants more RTB dollars, they need more quality impressions. With over 120,000 QPS available (translating to roughly 300 billion impressions monthly), more raw scale is not the solution.
The industry accepts low standards. However, it’s wrong to put the onus solely on buyers to find the quality. In a traditional stock exchange, buyers don’t worry that a business is unsavory. Buyers get certain levels of quality and guarantees. Information is freely available to evaluate the stock.
We don’t have these mechanisms in online advertising today. If the buy side demanded guarantees from the exchanges, much like demands imposed by advertisers on ad networks, the fat will be trimmed.
Nathan Woodman, COO with ad buyer Adnetik, supports this notion: “Quality is always in the eye of the beholder and can only be judged if the ad requests are transparent. Publisher transparency helps the buy side discern the good from the bad.”
Fundamentally, the industry needs a new yardstick to qualify data behind impressions. It needs a true QPS metric, or biddable QPS -- inventory that advertisers actually want. The ‘Q’ needs to stand for quality, where ad buyers should be able to measure more than throughput. Instead of wading through the glut of inventory in exchanges, why not narrow it down to the pool of inventory with quality behind it -- above the fold, brand-safe, name-brand publisher, etc.?
Publishers can also benefit from true QPS. More of the right supply available, and less of the wrong supply, lifts value and CPMs. Large QPS means that publishers are managing the flood of advertisers coming in to fill the bulk -- advertisers can be unsavory to publishers as well.
True QPS enables publishers to set inventory quality standards that matter to them and sell impressions without worrying what ads may come their way, or what they are giving away to an open market.
If the industry can carve out high-value impressions and make them available to an exclusive environment of buyers (e.g. the private exchange model), this effectively cuts out a lot of the clutter. The entire ecosystem should look to drive this movement to raise the value for all stakeholders.