• by George Levin , Columnist, February 9, 2018

There are wide-ranging opinions on the overall health of the advertising industry but one thing remains certain, the lack of transparency is still a major headache for the industry as a whole. However, it’s a significantly smaller problem for e-commerce buyers who use the cost of purchase/registration as their essential metric of success.

For brands and agencies, it’s a completely different scenario and, with that, comes a whole set of new problems. When we talk about less tangible goals such as brand awareness and reach, brands solely focus on the impressions they buy, the impressions being generated by humans and ideally, that they’re coming from good quality publishers rather than spoofed domains. The era of buying CPMs is over; buyers want to know what they buy and where they buy it from. 

To solve this problem we must define the problem in itself. A few years ago, there was a very broad understanding of the transparency problem wherein industry experts were solely talking about the low quality of programmatic inventory. Now the problem is split into several isolated sub-problems and each sub-problem is addressed separately. The Ads.txt (Authorized Digital Sellers) initiative aims to increase transparency in a way in which programmatic advertising is sold to protect buyers from domain spoofers.

Verification products, such as IAS or DoubleVerify, detect fraudulent impressions while also helping to prevent brands from buying fraudulent impressions. Then there are artificial intelligent algorithms that learn, in real-time, how to buy impressions with the highest probability of success. In other words, instead of solving one large broad problem of transparency, the industry has evolved to solve smaller and more specific areas of trouble. 

Education throughout the advertising industry is also extremely important. The more articles and conversations written and discussed about these problems, the better understanding professionals can have about them. Five years ago, buyers didn’t think about view rate, they instead thought about CPMs and CTRs. This massive lack of understanding created a tremendous amount of fraud. Some bad actors were artificially increasing CTRs on their domains, which in turn led to agencies buying more traffic from these domains, as they believed these domains were performing at an extremely high level.

Two years ago, buyers didn’t believe it was suspicious to be buying premium domains (like CNN) from 10 different SSPs with different CPMs while CNN, in fact, only worked with one or two SSPs. The Ads.txt initiative helped explain to the industry how domain spoofing worked. Agencies now only buy from authorized sellers with Ads.txt. The more brands know about these industry problems, the more questions they can raise to their agencies and technology providers. 

However, not all problems have yet to been solved. There are still too many things happening under the hood. For example, hidden fees (The Guardian is suing Rubicon) still remain a huge issue throughout the industry. In my opinion, the best solution is for brands to take all of their programmatic dealings in-house. That is truly the only way to achieve full transparency and to regain full control.

Building such a sophisticated advertising tech platform is difficult, but that’s only the first step. Maintaining it, protecting it, while simultaneously keeping it up-to-date, is even more challenging. However, there are now many unique and different SaaS products that could be used as a foundation to begin building your own ad-tech platform. Some companies can provide bidders, another companies will just sell user interfaces, AI algorithms, etc. Brands in return, don’t need to hire an engineering team, they instead just need a few product managers to run their projects.

Looking ahead, I believe that in two to three years there will be no companies using DSPs and that brands will own all of their own ad-tech platforms to take full control over how they buy programmatically.