Marketing TechnologyDigital AdvertisingHow the whitelisting trend could impact the digital ad market

How the whitelisting trend could impact the digital ad market

Advertisers are more concerned than ever about brand safety, and one of the primary ways they're trying to keep their ads from appearing in unfriendly places is through whitelisting. But as more and more brands turn to whitelisting, some are talking about the impact this will have.

Advertisers are more concerned than ever about brand safety, and one of the primary ways they’re trying to keep their ads from appearing in unfriendly places is through whitelisting.

But as more and more brands turn to whitelisting, some are talking about the impact this will have.

Here’s a look how heavier use of whitelisting could affect the digital ad market, and how brand advertisers might be able to deal with the effects.

An epiphany moment for brand advertisers

While brand advertisers, in search of reach and efficiency, have been embracing programmatic advertising, the recent controversies have brought with them an epiphany: there are a lot of places on the web where advertisers don’t want their ads to appear.

“There is not a million sites that make sense for all advertisers,” Marc Goldberg, CEO of adtech firm Trust Metrics, told AdAge. “The number of marketable domains is much smaller.”

One major advertiser, JPMorgan Chase, has already come to that conclusion and taken action. It recently revealed that it has cut the number of sites it advertises on from a whopping 400,000 to just 5,000.

But if every advertiser followed JPMorgan Chase’s lead, the digital ad market could become dominated by whitelists, many containing the same top properties. As a result, demand for a relatively small portion of ad inventory could grow substantially, pushing prices up.

Image via Pixabay

While that would be good news for publishers on the whitelists, advertisers could find themselves paying a lot more for a lot less, at least as far as reach is concerned. And in many cases, advertisers could even find themselves shut out from buying inventory they want.

But it could get even worse. As Jared Belsky, president of agency 360i, pointed out, “If fewer sites are ‘eligible’ for ads, then this becomes much more of an investment play. The big guys gobble up inventory and arbitrage it all over the place, re-creating the ad networks of the past, which we are running from.”

In the worst-case scenario, the demand for brand-safe inventory could become so concentrated in a relatively small number of commonly whitelisted sites that well-heeled arbitrageurs jump into the market with the sole intention of buying inventory to trade like a commodity.

While some of this activity no doubt takes place today, a digital ad economy dominated by whitelists could attract speculation at a level not seen before.

The upside to whitelisting

But are such worst-case scenarios really going to come to pass?

While increased whitelisting could definitely present numerous challenges and concentrate demand in ways that make the most desirable ad inventory even more expensive, the limitations of whitelisting will probably ensure that it isn’t used 100% of the time. Furthermore, increased whitelisting could also create plenty of opportunities.

First, brand advertisers that are willing to invest time in developing and updating their whitelists, and don’t resort to global whitelists that their agencies use across clients, may find that they are able to identify smaller sites with quality inventory that are being overlooked by advertisers less willing to invest time.

JPMorgan Chase’s whitelisting approach demonstrates one way that brands could find diamonds in the rough.

Instead of setting out to manually evaluate the 400,000 sites its ads were appearing on, JPMorgan Chase first whittled down its list of whitelist candidate sites to those that had delivered actions, such as click-throughs or conversions, beyond impressions. That reduced the universe of sites it had to review to just 12,000.

Image via Pixabay

When all was said and done, JPMorgan Chase was left with 5,000 sites it feels comfortable advertising on.

The whitelisting process gives advertisers the opportunity to better define what “brand-safe” actually means to them. While brands have good reason to avoid sites that publish “fake news,” for instance, the increased emphasis on whitelisting will also force them to more thoughtfully consider their standards.

Second, the forces that are driving brands to use whitelisting should remind them just how incredibly indirect, convoluted and shallow so many of their ad relationships have become in the age of programmatic.

While the many benefits of programmatic ensure that programmatic is here to stay, savvy advertisers can use the whitelisting process to identify sites that they have good reason to establish deeper direct relationships with.

In some cases, advertisers can have their cake and eat it too, thanks to programmatic direct. But there is value in other kinds of direct relationships as well.

Sponsorships and deals that provide for prominent brand integration can be incredibly powerful – as demonstrated recently by Toys ‘R’ Us’ opportunistic deal with Animal Adventure Park to sponsor the park’s ‘Giraffe Cam’.

Perhaps it’s time for advertisers to consider the benefits of pursuing these kinds of relationships even if they don’t offer instant gratification in the form of massive scale and 100% automation.

Finally, it’s likely that the growth of whitelisting will eventually lead to better technology. Ad networks and exchanges can’t afford to see large swathes of their inventory go unmonetized.

At the same time, brands need to accept that whitelisting is imperfect: it is based on the notion that certain publishers can be trusted even though supposedly brand-safe publishers can publish content that advertisers don’t want to be associated with.

The PewDiePie backlash demonstrated that quite well. Ad inventory on his videos was among the most valuable on YouTube — until advertisers recognized that some of the content he was publishing was incredibly offensive.

With this in mind, it seems likely that eventually, adtech will eventually have to build a better mousetrap. Don’t be surprised, for example, to see greater use of technology that analyzes the content of a page (or video) in real time and makes a judgment about its brand safety.

Advertisers would have the ability to specify what level of brand safety they require, and could even restrict their ads from displaying alongside specific types of content, such as content that deals with legitimate but controversial topics that they would rather avoid.

Such a content-based approach would never be perfect, but it could help address whitelisting’s biggest shortcomings and keep advertisers from losing out as they finally seek to deal with a digital advertising market that is now filled with seemingly countless unsafe neighborhoods.

Related Articles

Should brands bring their programmatic advertising in-house?

Digital Advertising Should brands bring their programmatic advertising in-house?

1m Luke Richards
What's in a name? The ad industry debates "programmatic" versus "automation"

Digital Advertising What's in a name? The ad industry debates "programmatic" versus "automation"

5m Al Roberts
Top three programmatic trends in 2017

Digital Advertising Top three programmatic trends in 2017

10m Daniel Surmacz
What are the biggest obstacles to programmatic advertising?

Data-Driven Marketing What are the biggest obstacles to programmatic advertising?

1y Rebecca Sentance