Programmatic Ad Exchanges Push Towards Greater Transparency

As digital media continues to grow, so does the practice of buying digital ad inventory programmatically. Programmatic’s growth has outpaced measures to keep the ad exchanges and the buying process transparent, much to the chagrin of advertisers.

As can be imagined, an online ad auction in which billions of bids are happening at any given minute is infinitely more complex than trying to follow the lightning-fast lingo of a real-life auctioneer. Due to this complexity, some questionable tactics have been able to arise that buyers aren’t pleased with, like bid caching and bidding multiple times at once. There have not been any rules established by exchanges to forbid certain questionable tactics ­– until recently.

In October, CEOs from six of the top ad exchanges (OpenX, PubMatic, Rubicon Project, Sovrn, SpotX, and Telaria) signed a letter to advertisers and publishers promising that their exchanges would uphold higher standards for transparency, fair practices, and efficiency. To add legitimacy to their promise, they entrusted Trustworthy Accountability Group (TAG) to take what is listed in the open letter and create a new certification that ad exchanges can be awarded if they comply with the official checklist. TAG is currently reviewing the open letter and creating the finalized certification checklist, likely to be finished in early 2019.

 

What is trustworthy accountability group (TAG)?

TAG is a third-party auditor focused solely on the digital advertising industry. It is a not-for-profit company that is an accountability program for various companies on all sides of the digital ad supply chain. While the name Trustworthy Accountability Group may be unfamiliar to many, the associations that created it are well known: the American Association of Advertising Agencies (4A’s), Association of National Advertisers (ANA), and the Interactive Advertising Bureau (IAB). TAG focuses on eliminating fraudulent traffic, combatting malware, promoting transparency, and fighting internet piracy.

 

What Might The New Tag Certification Look Like?

While we do not know what TAG’s final checklist will be, we assume that much, if not all, of what is listed in the open letter will make its way to the final iteration.

The letter in its entirety can be found here, with the most central practices listed below:

  • No hidden fees will be charged
  • Bid requests, winning bids, impressions, and clicks will all be up for auditing
  • Buyers must be notified in advance if the exchange alters the auction dynamics
    • First-price and second-price auctions will specifically be called out, which is a direct action to counteract the untold bid caching that was done by Index Exchange
  • Only one bid request per ad can be sent (directly combatting the practice of bidding multiple times to increase the chance of winning a bid, which has led to problems like increasing the price needed to fairly win a bid)
  • Ads will be scanned for malware
  • Ads will be scanned for invalid traffic
  • Domains will be scanned for brand safety, ad count, refresh rates, and traffic quality

 

How Will This Affect Advertisers Now and in the Future?

At the highest level, the signing of this open letter and the creation of the certification will lead to a programmatic advertising auction that is more equitable. While day-to-day work may not see drastic changes, there are questions and expectations that advertisers should consider:

  • Based on the statements about invalid traffic and malware, ad quality will likely improve overall. Advertisers should logically see the percentage of invalid/bot traffic decreasing, but at this time it is difficult to say by how much. Will invalid traffic ever be down to 0? It’s highly unlikely, but improvements should still be welcomed.
  • The enforcement of sending just one bid could potentially lead to lower rates for the demand-side platform (DSP), but at this time it is difficult to determine how noticeably different winning bids will be until the rule goes into effect.
  • While the future TAG compliance of the six listed exchanges is expected, it would be logical and likely that the two largest holders of remnant ad inventory, Google and AppNexus, will also push for compliance due to the fact that both Google and AppNexus executives are on the TAG Board of Directors.

Main source: Ad Exchanger

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