Transparency – Isn’t it Obvious?

Audience optimization and auction marketplaces present a bright future for online display advertising – one with a more efficient end-to-end process, higher performing campaigns, and reduced media waste. However, even with a winning formula – “the right ad to the right person, at the right time, and right price,” – there’s still an elephant standing in the room: transparency.

As brands and agencies embrace a new paradigm of impression-level media buying, visibility issues will become more acute. Brands accustomed to buying media through classic, undifferentiated ad networks generally look to reach more eyes and drive response for the least amount of money. Thus, increased visibility isn’t necessarily their primary motive. On the other hand, for high quality Fortune 1000 brands seeking to transition significant budget online for brand building and performance, knowing where their ad is placed is paramount.

Compounding this issue is the use of iFrames, an HTML structure that allows another HTML document to be inserted into an HTML page. Though helping with bandwidth use, iFrames makes it near impossible for accurate third-party reporting and brands to have clarity into the content surrounding their ads. This leaves buyers diving for success in a murky farm pond. The last thing an agency wants is a call from a steamed CMO complaining about their brands’ ad rubbing elbows with inappropriate content. A key to opening budget floodgates for online display is assuring marketers that the channel is an effective, efficient, and safe place to advertise.

To give marketers clarity, options, and control, the Interactive Advertising Bureau’s Networks & Exchanges Committee has established industry-defined content tiers: all audiences; everyone over 12; and mature audiences. The IAB has also created source level transparency tiers such as full real-time disclosure; full disclosure; partial disclosure; and minimal or no disclosure (i.e., blind buys). These standards provide advertisers with a guide to value the impression, or note the risk regardless of the publisher’s degree of transparency. (Disclosure: My company is a member of the IAB Networks & Exchanges committee.)

While advertisers seek standards, some publishers worry about channel conflict because direct sales are challenged by auction marketplaces. Specifically, publishers are apprehensive about remnant inventory and third-party relationships negatively affecting CPMs (define), which is little incentive to increase transparency at the site and content level.

However, there’s a silver lining. Real-time bidding (RTB) actually enables publishers to gain control in a variety of ways such as having the means to create custom audience segments through direct sales teams, link to select buyers of their choice via ad exchanges and aggregators, and establish audience demographic and behavioral profiles through demand-side platform (DSP) direct buys. Audience optimization is data driven, and the leading technology can crunch thousands of variables to determine the perceived value of an impression for a brand in mere milliseconds. If an impression isn’t transparent, the likelihood of it fetching a premium bid is low. As available inventory scales, high-end publishers that don’t offer their inventory could lose out on huge revenue.

If all this hand wringing seems familiar, it should. This is not the first time the online industry has created advertising solutions that have few standards in place before they take off. DSPs and ad networks should focus on pushing for IAB standards to form safe branding environments and ensure a balance when it comes to the relationship between transparency/value and price. For example, as marketers select an IAB content tier for brand safety, blind impressions cannot be independently ranked and vetted, and will most certainly receive a lower bid price due to the perceived risk. Even worse, many advertisers simply won’t bid at all.

There’s a clear opportunity for digital display to take a larger piece of the budget pie, but we need to pull together as an industry to meet the demands of brands for an efficient, effective, and safe channel in which to advertise. Publishers, agencies, data providers, DSPs, and ad networks all share a common goal. The savviest of us understand that the easier and more efficient the process of media buying is, the more budget moves online – more bidders translates to higher bid prices. Instead of impeding growth, industry partners should energize it and push for greater transparency to give buyers the confidence and control over their investments.

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