[Column] Karan Singh: Why transparency is key to success in programmatic advertising
It’s estimated that around 36 billion devices will be connected to the internet by 2025, this represents a 30% increase on 2018. The upside for advertisers is that this creates a large audience and even larger opportunity for them to connect to their target consumers.
However, to make sure that these advertisers are reaching the right audience, in the right environment, it’s essential that the technology, or technology partners, helping them achieve this is both trusted and transparent.
The complexity of the new advertising supply chain
In the past, advertising deals were completed over the phone or via email, today digital ad transactions are completed programmatically in a fraction of a second by faceless computer networks and systems. The explosion of this programmatic industry has transformed the digital advertising landscape. However, while it was created to drive efficient ad placement, the reality is that it has also introduced a complex web of different suppliers across an increasingly murky and fragmented supply chain. As a result, both buyers and sellers have seen a loss of control and transparency – both in terms of where ads are placed and how fees are being split up across the various entities involved.
At the same time, marketers and advertisers are coming under increasing pressure to justify return on ad spend. The combination of siloed spending, rigid metrics and a convoluted supply chain makes it extremely hard for buyers to prove marketing’s impact on business outcomes. This has left marketers and advertisers crying out for the industry to take a step back and look at how it can simplify what has become an incredibly complex and opaque landscape. According to our recent survey, Demystifying Curated Marketplaces – A Guide for Buyers to Drive Efficient Supply Strategies, 30% of buyers that responded said that their primary objective is to improve transparency in their ad spend.
Increasing transparency and the curated marketplace
Of course, the industry has taken positive steps to address this. In December of 2018, following our acquisition of AppNexus, we announced that agreements with many direct publishers in our marketplace and partnerships with third-party transparency companies had facilitated one of the programmatic advertising industries’ first fee-transparent supply-side platforms (SSP), giving buyers an unprecedented level of visibility into technology fees. These direct relationships now represent 65% of transactions on direct sellers in the UK and 68 per cent of transactions on direct sellers globally.
But we still need to go further. Two things are critical to helping the industry take it’s next steps away from this complexity.
Educating marketers – To understand how to regain controls over their ad spend and campaign performance, marketers need to have a greater knowledge of how the supply chain works. This has been made increasingly important given the fact that Google’s support for the third-party cookies are due to expire mid next year.
Going back to basics – One of the key things that will help create more transparency in the marketplace is going back to our roots and re-establishing direct relationships between buyers and sellers.
Across some certain global markets, curated marketplaces have appeared as a potential key vehicle to continue programmatic’s evolution while also addressing several of the complexities.
Curated marketplaces make it possible for industry players to easily build programmatic supply solutions with a broad array of features that combine high-quality inventory, new levels of transparency, and valuable audience and contexts at scale. Importantly these marketplaces are built on direct relationships between buyers and sellers so they go a long way to helping to rebuild trust in the system. Centralising spend in a curated marketplace, can help buyers take a big step towards greater transparency.
Programmatic advertising is only set to grow in the Netherlands with it estimated that spend will reach $404M in 2021. To ensure this is spent wisely, it’s vital that advertisers are utilising effective technology and creating strong relationships with trusted partners. By increasing transparency in the supply chain we can provide greater access to accurate information on data, pricing and placement meaning buyers can make informed purchase decisions, and advertisers can optimise their spending and ad delivery.