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'Fixing Programmatic Trading Models'

Ad tech’s meteoric rise is disrupting the current media landscape, but cross-device targeting, attribution and trading models, plus the ‘closed vs. open ecosystem’ debate must be addressed if the sector is to become the de-facto way for media to be bought and sold, according to speakers at the inaugural ATS New York. 

ATS New York kicked off this morning and saw speakers from some of the sector’s leading companies, including AppNexus, Facebook, IPONWEB debate how the industry would pan-out in the months and years ahead.

AppNexus president Michael Rubenstein opened the debate remarking to ExchangeWire CEO Ciaran O’Kane that 2014 was a landmark year in the “ad tech power game” given the extent of consolidation and strategic investments from some of the industry’s biggest names (not least advertising holding group WPP’s $25m investment in his own company).

Citing Google’s continued investment in DoubleClick, and Facebook’s recent Atlas relaunch, he told attendees, that such interests essentially mean such moves mean these players have “conflicted interests”, adding that this offered AppNexus a key point of differentiation.    

“[Facebook COO] Sheryl Sandberg has said how important ad tech is to Facebook’s future, and I don’t think that would have happened a year ago.

“Lots of big Silicon Valley companies think they have to have an ad tech offering either as an offensive, or defensive play… They are there to maximise their wallet, and that’s okay [for them], they are there to maximise value [for their shareholders].”

Open vs Closed 

But while this may bring new innovations to the market, advertisers and publishers will need more “agnostic partners”, he noted.

“We are specifically pro-agency, and we’re going to continue to build our open platform… The way companies such as Google are going to run into trouble is to advocate a closed ecosystem as the way [forward] to buy media.”

Rubenstein later advocated that such technologies should be interoperable to provide choice for both advertisers and publishers in order to maintain a more open playing field.

“We are well position to take the fight to them, you need choice in the market,” he added.

Cross-device storytelling

Meanwhile, Facebook’s head of Atlas product marketing, Lori Goode, also took to the stage to further explain the social networks’ vision of how it can enhance cross-device media plans – especially in light of the diminishing power of the cookie for online advertising purposes – in a way that can help the industry address its attribution modelling.

“Cookies are browser based for one, and work randomly on mobile, they work sometimes on browser, but not necessarily in-app,” she said.

However, Facebook uses Atlas to leveraging information that is mobile specific, such as the IDFA, and then ties that to the person (in a privacy-compliant way) to authenticate the person that uses the device.

“So now we can tie those things together, we can then use it for things like  [more responsible] frequency capping and sequencing [i.e. telling a story in stages, across devices],” she added.

Using this approach can lead to advertisers adopting a more holistic attribution strategy, instead of using the current de-facto ‘last-click’ model that often incentivises third-party ad tech providers to retarget a user at every given opportunity (much to the ire of consumers).

More conflicts of interest

On a related note, keynote speaker Dr Boris Mouzykantskii, IPONWEB, CEO, told attendees that the current models of programmatic media trading are conflicted, with the three stakeholders of the buy-side often working towards opposing goals.

“Advertisers want quality, and the best impression, [with associated KPIs], while the agency wants the cheapest media cost [to protect their margins], meanwhile the DSP wants as many bids as possible,” he said.

These goals are complicated and competing leading to click fraud, and  arbitrage being widespread in the industry, according to Mouzykantskii.

He went on to argue that a more transparent ecosystem can be achieved if advertisers and their partners apply some restrictions, that plan towards sequential goals, resulting in each party’s interests becoming more aligned.

This involves defining a sequence of prioritised goals, such as: Number of conversions and desired media cost margins, he argued. This is how transparency can be achieved.

 

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