Commentary
Transactional Transparency: It's Coming To Programmatic
- by Tobi Elkin , Staff Writer @tobielkin, February 17, 2016
Header bidding also reduces friction between marketers and publishers, and it helps marketers improve their forecasting.
Technically, all parties in the ecosystem benefit from the header, according to Andrew Casale, president and CEO, Index Exchange, a supply-side platform and premium media exchange. Casale, like others in his universe, is trying to help publishers become better programmatic sellers. Everyone benefits because the header drives the supply of available inventory.
Still, there's an ongoing concern in the estimated $15 billion programmatic marketplace about transparency. There are more vendors than ever that sit between the marketer and the publisher. A few I’ve spoken to are talking about the lack of transparency in the system -- or the ability to actually trace the path of each dollar and where the fees are.
The problem, as Casale sees it, is that business models in ad tech are in “black boxes." More oversight -- and transparency -- are needed.
Marketers want their media dollars to be working media dollars and to go straight to the publisher, not a middleman. And publishers want as much money as they can get. So you could say marketers and publishers want the same things. The trouble is, there’s a growing consensus that there’s an ad tech “tax.”
“Publishers are asking way more questions about where the dollars go," says Casale. "For example, 'What happens to the bid we’re placing with MediaMath? Can we see the raw transaction logs? How can I validate what I’m getting?’”
Essentially, the issue is: How can what has essentially been a “black box” process be transformed into something publishers and marketers can fully understand? How can they understand the transaction at each step in the process?
The bottom line: The more people ask the question: "What's happening to my dollar?," the better off the media landscape will be.
Tobi Elkin is the Editor of MediaPost's Real-Time Daily and the RTBlog. You can reach Tobi at telkin@mediapost.com.
The way to transform the black box process so people understand the transaction on a step by step basis is obvious---get humans involved in the step by step process, with the computers assisting them.
Again and again we hear that transparency is the root cause of why programmatic is not fulfilling its destiny. Transparency is a by-product of a much simpler and more obvious problem: mis-alignment of incentives. Incentives rule our human behaviors and until you address this very simple, well-understood dynamic you will continue to focus on the wrong picture. Vendors both buy-side & sell-side need to align their incentives with the brands(sell more goods) and the publishers(earn more money). To reach this paradigm you must create an open economic and open operational environment where both parties understand the situation more fully. Many will fail to take this higher path because it will force a new level of performance and shutter the storytelling. Our thesis of open economics and operations at Apogee was born out our witness to the distrust all parties share for each other. We believe as do our clients that this watershed moment will reward those who aggressively and unrelentlessly pursue this new dynamic.
The transparency issue in programmatic for publishers is the "tech-tax". There is a growing disparity between what an advertiser pays and what the publisher finally receives because of the multiple technology layers involved with programmatic media buying/selling.
I dont think the problem is the transparency within programmatic.
The issue, in my opinion, is that the lack of transparency is with the types of and quality of traffic that is generated to publisher properties.
The fact that this has become more of a public issue with programmatic is purely timing. There have been HUGE transparency issues with traffic quality since way before programmatic, when agencies did all direct deals with publishers.