The worlds of media, marketing and advertising contain a lot of “black boxes" -- systems and technologies that perform functions without a lot of obvious visibility into how they do what they do. The list could include how ad servers make decisions, how location-based tracking projects where someone is (or was), or how a research panel balances its output.
I’m naturally curious. My father was a prosecutor, so being inquisitive (or interrogating) is how I was raised. And, I’ve always believed that those who know how things work have a big advantage over those who don’t.
To be clear, the lack of self-evident transparency into operations is not the result of a strategy on the part of the system creator or operator to deceive or obfuscate. It’s just that most of them involve very complex systems, disparate inputs and complicated algorithms — any or all of which may be modified at any time.
Thus, it’s just not simple or practical to make it easy for all to understand, particularly when the purpose of these systems is to drive a particular market output or result.
Net, net. It’s probably true that most of the folks working in our industry are relying every day on the outputs of less-than-transparent black boxes. Here are some examples. Test yourself to see how much you know about them:
Cable zone ad insertion. All those who watch television have grown up watching a smattering of localized ads during national network programming — the local car dealer ad during the Super Bowl, for example. Do you know how those ads were delivered? Do you know how the Q Tone works? Do you know why the ads are sometimes cut off?
TV upfront contracts. A massive amount of the entire national ad market is negotiated and committed over a two- or three-month time period. Do you know how those deals are structured? Do you know what options either buyers or sellers have? Do you know how those deals are guaranteed?
DSP auction bidding/header bidding. So you want to buy some digital ads on an exchange, maybe on Google or MediaMath or Xandr’s AppNexus. Do you truly (be honest) know how the auctions operate? Do you know how bids are accepted? Do you know how second bids or Dutch auction bids are calculated?
Header bidding has been an enormous issue over the past two year for digital publishers, demand-side platforms (DSPs) and supply-side platforms. Do you really know what header bidding is, how it works and why it’s so important?
ACR TV ad spot detection. Many of you have seen the results of automated-content recognition of TV content and ad spots: an output of properly equipped “smart TVs.” Do you know how the TV knows (ostensibly) what ads you watch? Do you know the difference between “fingerprinting” and “watermarking”?
Commissions, discounts and rebates. Yes, this became a sore spot in our industry over the past years, and may still be for some time to come. However, if over the previous decade or two everyone in the U.S. ad market had worked to learn about what these were and how they operated by geography, vendor and partner, the transparency work of the ANA might never have been needed.
Addressable TV ad delivery. You hear and read all the time about how big and important addressable ad delivery on TV is becoming. Do you know how different TV ads are actually delivered to different households? Do you know how systems across AT&T, Dish, Verizon and Altice do it? Do you know which have to store ads on personal DVRs in the homes, and which can deliver the ads dynamically? Do you know how they differ from the system employed in Europe by Sky and its AdSmart unit?
CTV ad delivery. Connected TV ( CTV) is pretty buzzy these days. Do you know what CTV actually is? Do you know the formats of ads that can be delivered? Do you know the difference between CTV and addressable TV ads and AVOD (ad-supported video-on-demand) ads?
Why does it matter if you know how these black boxes work? Isn’t one of the perks of management that you don’t have to know how the sausage is made? Isn’t that why you hire technologists and experts?
If this is the way you see the world, I suggest you're taking enormous risks both with your career, company resources and decisions you’re making for your employer.
Knowing how black boxes work means tens of billions of dollars a year in margin for companies and people in our industry who get them right.
What about you? Do you know how the black boxes in your business work?