Commentary

It's What You Do With Transparency That Matters

The transparency movement in digital advertising is well underway. But if we’ve learned anything in recent months, it’s that uncovering the truth doesn’t magically drive better outcomes for buyers or expel bad actors from the ecosystem. It’s what you do with the truth that drives lasting change.

For example: In 2017, buyers pushed hard to figure out how much of their dollar is torn up as it moves through the ad tech ecosystem. They directed pressure on vendors of all kinds, but particularly exchanges, threatening (rightfully) to deactivate those who didn't expose their fees.

It worked. Today, "no buy-side fees" is table stakes, and most buyers wouldn’t consider working with a platform that charges them. A victory? Yes, but also a missed opportunity to address the whole issue. The other half of the fees discussion is what exchanges charge on the sell side, commonly called Total Take Rate (TTR).

Buyers may be once-removed from TTR, but it’s every bit as critical as buy-side fees to their success. TTR directly affects campaign ROI, auction clearing prices, and win rates, yet few buyers seem to focus on it, and even fewer hold platforms accountable for excessive deductions from working media.

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This oversight is even more puzzling in the context of header bidding: a technology that democratized access to supply and made large swaths of inventory available across multiple exchanges. In short, it’s easier than ever for buyers to choose the exchanges on which their spend goes further. 

Why do so many buyers allow their dollars to be unnecessarily picked apart? I believe the answer is education. It’s incumbent upon buyers and anyone who serves them—including agencies and demand-side platforms (DSP)—to raise awareness of TTR and to demand every buyer asks every exchange exactly how much of their dollar goes to working media. I find it hard to believe that any buyer would willfully run campaigns on an exchange that charges an average of 20-35% but it’ll keep happening to those who don’t know to ask.

Though DSPs are starting to expend significant energy studying the most efficient paths to supply, a symptom of the minimal awareness of TTR is that most buying algorithms and workflow tools do not yet consider this important factor. This, too, must be fixed. 

I’m not suggesting that exchanges shouldn’t charge fees on the sell side — they deserve fair payment for the value they provide. But exchanges that wish to remain competitive have a responsibility to disclose those fees and manage them appropriately. Buyers can’t directly control what exchanges charge sellers, but they can favor those that keep fees at reasonable levels — and that’s real power.

It’s taken years for the programmatic space to come to terms with its transparency demons. Transparency is progress, but it’s not an end in and of itself. The choices buyers make with this information is what moves the industry forward, and those choices matter more than ever. It’s time for buyers to stand up and vote with their dollars, or risk losing the gains for which they've fought so hard.

The truth is out there, buyers. It’s up to you to use it.

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