Few markets in the world are as opaque and complex as the digital ad market, though that hasn’t stopped digital advertising from growing into a business expected to account for a full third of total ad spend this year. However, the problems associated with the opaque nature of the market have become top of mind.
As a result, the industry may be entering an era of newfound transparency, which could dramatically change the way ads are bought and sold. Here are three reasons why.
1. The level of ad fraud is too damn high
Though the multi-billion dollar ad fraud problem isn’t a new one, 2017 has seen numerous high-profile ad fraud efforts uncovered.
Recently, it was discovered that an apparent MySpace resurgence was the result of ad fraud. This month, Uber sued one of its agencies alleging that it spent tens of millions of dollars on fraudulent ads. And Business Insider just revealed that it was able to identify more than 10 million fake impressions being offered for sale on exchanges in a 15-minute period.
A lot of ad fraud relies on the opaque nature of the digital ad market, and the programmatic corner specifically. In the case of Uber and Business Insider, fraudsters were profiting from their ability to engage in domain spoofing, which is when fraudsters effectively lie about the origin of ad inventory they’re selling.
While it sounds too simple to work, the reality is that media buyers, many of which buy countless ads through countless partners, are largely not scrutinizing their ad buys. In fact, in some cases, they and their partners appear to be completely asleep at the wheel. So they never notice suspicious ad buys, including those involving inventory that logically can’t exist.
In response to tactics like ad spoofing, the Interactive Advertising Bureau (IAB) came up with Ads.txt, a simple way for publishers to share a list of the entities authorized to sell ad inventory on their behalf. These lists, which are publicly accessible via a text file hosted on publishers’ sites, can be used by media buyers to ensure that they’re buying legitimate inventory.
A growing number of high-profile publishers are adopting Ads.txt and one company has even launched a marketplace in which only Ads.txt compliant inventory is available, suggesting that Ads.txt could soon become a fixture in the ecosystem. Of course, because Ads.txt requires publishers to publicly specify who is authorized to sell their ads, Ads.txt by its very nature would have the effect of significantly increasing the amount of transparency in the market.
2.Brand safety requires more transparency
Another subject that has come to the forefront in 2017 is that of brand safety. The revelation that major brands’ ads were being displayed alongside offensive and extremist content sparked a YouTube advertiser boycott earlier this year. As a result, advertisers have been pushing to ensure that they have a greater ability to ensure that their ads aren’t being displayed with content that for one reason or another they don’t want to be associated with.
This also require greater transparency, as brands will need more insight into where their ads are being placed, often by algorithms that are black boxes. And ad vendors will realistically need to give them greater controls, as Google is doing. These also have the effect of indirectly increasing transparency.
3. Election 2016 has caused a severe backlash
The final reason ad transparency is set to increase significantly is the 2016 U.S. Presidential. Facing allegations that their platforms were used by Russian operatives, major social ad platforms are responding to immense pressure to prevent bad actors from trying to sway public opinion going forward.
Facebook, the world’s largest social network, has already gone so far as to announce that it will be rolling out a feature that publicizes the ability to see which ads are running on any given Facebook page. Facebook’s announcement explained:
Starting next month, people will be able to click “View Ads” on a Page and view ads a Page is running on Facebook, Instagram and Messenger–whether or not the person viewing is in the intended target audience for the ad. All Pages will be part of this effort, and we will require that all ads be associated with a Page as part of the ad creation process. We will start this test in Canada and roll it out to the US by this summer, ahead of the US midterm elections in November, as well as broadly to all other countries around the same time.
Likewise, Twitter also announced that it plans to launch a Transparency Center that will show “all ads that are currently running on Twitter, including Promoted-Only ads,” as well as associated details such as how long they have been running and the creative for those ads.
Make no doubt about it: these voluntary changes will make a lot of data that has previously been difficult if not impossible for anyone to track easily accessible. And even then, it might not be enough.
Already, two U.S. Congressmen have put forth a bill called the Honest Ads Act that would require more transparency by law. While the proposed bill deals exclusively with political advertising, given the fact that distinguishing between political and non-political ads is not always so straightforward, it’s not a stretch to speculate that proposals for even stronger regulation of the digital ad market more broadly could be around the corner.
None of the major ad players want that so expect to see more voluntary transparency initiatives as they seek to demonstrate that they’re taking the problem seriously in hopes that they can ward off regulators.