Better Collaboration Holds the Key to Transparency

Programmatic has the potential to create the perfect market. If all supply and all demand could be brought together in one place, the true value of inventory could be established, and the optimum price could be achieved for each impression without the need for set-floor prices, or other constraints. But, in today’s opaque and fragmented ecosystem, the market is far from perfect. To realise the full potential of programmatic, providers on both the buy and sell sides must work better together to increase transparency and encourage collaboration. ExchangeWire speaks with Ben Price (pictured below), head of commercial operations, Future Plc, about what makes the current programmatic landscape so complex, and what can be done to increase transparency.

Tech providers must play better together

Programmatic isn’t complex because of the processes involved or the metrics used; but because there are so many providers all doing similar things slightly differently. A publisher, for example, may work with five different SSPs, all connected to twenty DSPs, with one hundred buyers. Each of these buyers has their own strategy, which includes bidding in different ways and using their own internal metrics for optimisation. On the buy side, traders may be buying from several platforms and numerous publishers. The more providers involved in the process, the more complex it becomes, and there is currently no glue holding it all together.

Solutions are slowly emerging to improve this situation. At Future, we’re currently working with OpenX and other partners on a header-bidder basis, which we believe is the first step towards a perfect market, as it allows all SSPs to see inventory at the same time in advance of it entering the ad server. By working together transparently using header bidding, SSPs can see inventory before it is sold and make it available to all demand sources to maximise our yields. Similar collaborative ways of working are required across the whole industry to realise the true potential of programmatic.

Shared quality metrics should be defined

Ad quality is a major issue within the programmatic ecosystem, but there is currently no uniformity in its measurement. Individual buyers and agencies are creating their own measures of ad quality and are using these to rate the publishers they buy from, buying inventory only from those with the highest scores. These quality scores frequently combine a number of different metrics, such as viewability, time in-view, cost-per-acquisition, and engagement and interaction rates. But publishers are in the dark about how individual quality scores are calculated, and how each specific buyers define quality, as buyers and agencies keep the calculations of such metrics confidential, making it difficult for publishers to optimise their supply in line with buyer goals. Some key metrics, such as cost-per-acquisition, can’t even be measured by publishers.

It is in the buyer’s interest to share their definition of quality with publishers and to allow them to enhance their inventory accordingly. But, providing insight into quality scores is problematic for two reasons. Firstly, buyers may have thousands of campaigns running at any one time, and these may be optimised to different quality metrics, according to their purpose. Secondly, buyers are reluctant to make their quality calculations known to the industry, as they can be seen as a competitive advantage.

To get around these issues, bodies such as the IAB and AOP set quality metrics for the whole industry to adopt. However, there is still the need for a tighter agency/publisher feedback loop to enable publishers to optimise their sites and make the best quality inventory available, and aid the highest possible engagement for buyers and their clients.

Industry-wide education is required

Ben Price | Future PublishingProgrammatic is perceived as a complex concept, and a lack of understanding of the key themes surrounding it – and the ubiquitous access to performance and quality metrics – only proliferates this viewpoint. The issue of viewability provides a good example. It would be overly intrusive to users if the industry attempted to ensure all ads are 100% in-view all of the time, so pursuing this particular goal is fraught with issues.

When you understand that viewability levels in the UK are currently only 54%, and other mediums such as TV and Outdoor advertising have never been bought on the explicit basis of if someone has/hasn’t seen it, you can really appreciate the issues that are posed by metric measurement in online and programmatic.

For years, buyers have bought viewability and clicks on an arbitrage basis for scale and price. Now, it is possible to only pay for ads that are 100% in-view; but this is only feasible if rates are adjusted for ads in-view, rather than ads served. If buyers are only paying for ads that are actually viewed, they need to be aware that both the quality and engagement will rise, but also the price per impression. This already happens when you increase quality metrics in an open auction and is what should happen in a perfect market. However, the logic behind this increase, and the benefits buyers would receive in terms of ad quality, are not widely understood. Industry-wide education into programmatic, and its associated themes, is required to ensure the whole industry understands what it has the potential to achieve.

All too often, programmatic buying and selling strategies are inward-looking, with focus on the short-term; but this will never allow programmatic to reach its full potential. The industry must look to the future and see the bigger picture, working together to consolidate and create transparent, universal, processes. While the perfect market might forever be a pipe dream, a lot can be done to streamline the programmatic ecosystem and make it more transparent across the board.

Ben Price, head of commercial operations at international media group and leading digital business, Future Plc, spoke at the OpenX School of Programmatic session, 'Fundamentals of Money & Measurement', which took place on 14th April 2016 at the Hospital Club, Covent Garden. For more information about the School of Programmatic please visit here