• by Skip Brand , June 11, 2013

Data, in my book, must deliver actionable insights to help publishers, advertisers and agencies make decisions that positively impact their businesses. (It has to make them money, essentially.)

In the programmatic world, it should also help deliver transparency. So I was looking forward to speaking with Michael Driscoll, CEO and founder of Metamarkets, a SaaS provider of visual analytics to the online advertising industry.

Obviously, since he’s knee-deep in trillions of data points generated through programmatic exchanges, Driscoll has some thoughts on transparency.  “It’s my perspective,” he tells me, “that with transparency comes accountability. There is a real need for trust in this industry.” Driscoll and I agree that the key to helping premium brands grow comfortable with programmatic buying is through transparency. And, as Driscoll is quick to point out, transparency requires analytics, along with the ability to sift and manage all the data generated through campaigns running across exchanges.

In Driscoll’s experience, transparency is a huge barrier for brands considering programmatic. Sometimes, he tells me, buyers have very simple needs.  “We’ve heard from buyers who simply want visibility into how much inventory is available in a certain DMA. With our service, buyers can find that information instantly,” he says.  “But with other exchanges the workflow is painfully manual. They’ll send an email to an account manager at that exchange requesting information about inventory in those DMAs. That account manager will then run a report, attach a spreadsheet, and email that spreadsheet back. That’s a workflow issue, but it’s also a transparency issue. If the information channel between buyers and what’s being sold is narrow, it creates friction. What if that buyer has another question? There’s a virtual curtain that’s between the buyer and seller that can really hamper the flow of those transactions.”

Of course, transparency can work the opposite way, too. I’ve spoken to premium publishers whose concern was that if they went programmatic, direct buyers might find the same advertising placements for less on an exchange .  These publishers were concerned that transparency on their end could lead to lost revenue.

Having experienced this viewpoint as well, Driscoll agrees that this is where private exchanges make sense. “A publisher on a private exchange would not permit inventory to be available to everyone on an open exchange. It’s available to a select set of premium advertisers only. It may be available to select advertisers at protected price points that are close to the direct channel prices.” Driscoll believes this is the right way to do it.  “The advantage, of course, is in the efficiencies gained from buying programmatically versus through a sales rep.”  Driscoll believes that a less preferable approach to the private exchange is for publisher to block buyers with whom they do not already have relationships in the exchange marketplaces.

Another interesting opinion Driscoll shared – so contrary to the rest of the marketplace – is that programmatic should actually cost more than buying directly.

Why? Because, apart from the efficiency, it offers greater control and better audience targeting versus using content as a proxy. “If you can hit your audience 80% percent versus 20% of the time, that should command a higher price point. Of course,” he adds, “there is some cultural shift that has to occur. Madison Avenue still associates ‘programmatic’ with ‘remnant,’ and brands are only beginning to embrace the power of a more automated, algorithmic approach to advertising.”

An additional challenge with better targeting is scalability – it’s a broader buy versus a narrower one.  Driscoll wonders whether advertisers will be willing to pay a premium for quality over quantity. “And then you begin to get into issues of how we measure campaign performance,” Driscoll says, warily. “That’s a whole other can of worms. Clicks will never accurately capture the value for premium content.”

Absolutely true. But that’s a conversation for another day.