05 Aug 2014 | Daniel de Sybel
Clients are rightly demanding more transparency in digital advertising, writes Infectious Media's Daniel de Sybel - but are they focused on the right type? It's time to make some clear distinctions.
"Transparency" in online display advertising has become somewhat of a dirty topic. Being accused of lacking transparency now carries connotations of nefarious media executives planning new ways of making money by increasingly obscure means. Advertisers are seen as the victims, tempted by promises of smart technology and more efficient buying, persuading them to spend more in areas they don't really understand.
Whilst there will always be some in the industry looking to make a fast buck from complicated media buys, the debate about media transparency is actually much deeper and more involved. Rather than actively seeking to hide some of the more unpleasant practices of the industry, the majority of media buying obscurity either lies in a lack of competence, or the failure to invest in the adequate technology and education to ensure advertisers understand what they are buying and how much it costs.
Transparency loosely falls into two, often confused, categories: financial and operational:
- Financial transparency (as it suggests) is being able to see exactly how many of your marketing pounds go to media, data, technology and service
- Operational transparency is about understanding where your ads are served, which metrics your optimisation algorithm uses and the general running of your campaign, including brand safety measures.
Whilst financial transparency tends to generate the controversy in the press, understanding operational transparency is key to driving the industry forward and delivering on the promises of real-time advertising.
Most of the recent debate has focused on agency groups' trading desks, with commentators saying these organisations provide little transparency - financial or operational. In some cases, agencies have been compelled by advertisers to create trading desks run by their subsidiary agencies rather than the parent holding group. Many advertisers are already looking at alternative suppliers or even taking matters in-house. So what has led to this?
It seems the idea of ad networks getting away with non-transparent margins for over a decade has resulted in the large agency groups believing they could do the same. However, unlike most, I don't feel that the main issue is financial transparency.
Being financially transparent is easy as long as you keep it simple and can appropriately justify why technology, data and service all need to be considered individually. I'm not a great fan of the adage, "if it performs, why would you care how much margin is being made?" It assumes the ends justify the means and it opens up traders to look to game attribution in order to drive up their own profits at the expense of the advertiser's true goals.
Instead, providing proper financial transparency allows advertisers to understand if their goals are realistic and/or if they need to reassess their media budget allocation. It also engenders trust which is essential in any business relationship, especially in an industry as complicated as online display.
For me, the real issue is operational transparency. We live in an era where there is more data being collected about more things more often than ever before. This makes operational transparency hard. A typical midscale trading desk running through an off-the-shelf demand side platform (DSP) will typically see 50-100 million impressions a day across between 10 thousand and one million domains.
Once you factor in all the different elements that could affect a campaign's performance (e.g. placement, viewability, time of day, day of week, creative message, creative size, page category, contextual keywords, audience segment) you end up with an enormous wealth of data that describes every single last impression served.
Without smart technology to collect, aggregate, analyse and visualise this data to find the drivers of performance, and without dedicated teams of people to sift through this data to uncover the pearls of wisdom that are hidden amongst the sea of noise then all you have is a very manual way of executing blind campaigns.
Algorithms are supposed to help with all this, but you need an understanding of the data before you can really understand what algorithm to use and when. The lack of operational transparency some advertisers get from their agency trading desk doesn't represent an intention to deceive. The desks just don't have the capability of processing all the data they generate, let alone the resource needed to analyse it all and present it back to an advertiser in a summarised and informed way.
This is the true problem, and the one that the transparency debate in the press actually obscures. There are few companies intentionally trying to mislead advertisers.
The reality is that the lack of operational transparency within most companies running programmatic buying is down to something that no company wants to admit. Arguing over the reasons why you're not financially transparent is preferable to admitting you don't know what impact an online display campaign is really having.
To fix this advertisers need to demand more information about their campaigns, not just after they've finished running, but whilst a campaign is active. Insights around domains, placements, viewability, time of day, day of week and the whole host of other elements that can affect a campaign's impact should be freely available.
More importantly a supplier needs to be able to demonstrate why a campaign is being run in a particular way, how this then addresses the advertiser's goals, and be able to articulate clearly why not everything will perform as desired but why it is still worthwhile pursuing.
One of the most attractive aspects of real-time advertising (RTA) is the opportunity to test and learn. If those learnings are hidden, campaigns are valued purely on efficiency, which isn't good for anyone in the industry.
Transparency is, thus, not an advertiser issue - it is a market issue, and one which needs resolution for the industry to continue to move forward and grow.
