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Day and Night
A new dawn is trying to break in the world of online banner advertising. That dawn will bring a bright light of transparency for advertisers when the new types of ad verification finally become a reality. But a stubborn cloak of darkness just won’t let go of the night. And for now, the nocturnal rats and raccoons of our industry roam free and do as they please under the cover of blind ad networks and exchanges.
Every few years new innovations sweep across the online ad industry that promise new insights and efficiencies. First it was CPA networks, then it was targeting networks, now it is exchanges. But while these innovations have brought advertisers new benefits, they have also created unintended havens for rats and raccoons – fraud and waste – to hide in. CPC/CPA networks created the perfect breeding ground for a practice known as cookie bombing to flourish (flooding the market with down-funnel inventory in order win 100% credit for the conversion). Targeting networks created an inviting vehicle to shovel huge amounts of unsanitary user-generated inventory into otherwise desirable audience buys (remind anyone of the mortgage-backed security mess?). And while exchanges bring much needed innovation and efficiency to the display ad marketplace, they also inadvertently provide the perfect cover for all sorts of crummy inventory: off-screen impressions, split-second exposures, and impressions that are otherwise not-as-described.
Advertisers are all too familiar with the problem of not knowing what they actually got for their spend. But in digital display, it’s become institutionalized. This is not to say that the erosion of transparency was intentional or that there’s a conspiracy to conceal. It’s a simple result of the growing complexity in our value chain, more market flexibility, and more middlemen (middlebots, really). And it’s not that nobody is trying to fix it. Quite the opposite. Over the last 5 years venture capitalists from coast to coast have been building an ad tech vendor army to try to restore transparency to digital advertising. But they’re not succeeding, and the dawn isn’t breaking, and the rats are still winning. Here’s why.
Various new “verification” techniques, such as brand safety, audience validation, and ad viewability have arisen to solve the problem of campaign transparency. However, these are typically proprietary point solutions that are marketed by individual firms whose M.O. is to win each other’s customers while working around each other’s patents. This fragmented and non-coordinated dynamic hasn’t led to broad market adoption, and it doesn’t work for advertisers. Most importantly, it won’t give major brands a reason to take online as seriously as we’d all like.
Let’s be realistic. The whole ad space isn’t going to be controlled by one benevolent overlord that will grace us with the one golden inventory rating solution. And the ad tech companies aren’t going to put their secret techniques into open source. But if the players in the online publishing and ad tech communities really want brands to move dollars out of print, outdoor, and TV and into online, we’re going to have put our differences on hold and come to the table.
The lack of transparency in display holds back the whole industry, and it will take cooperation by parties on all sides to create a standard. For the record, conforming to a common measurement standard doesn’t mean companies can’t differentiate (there’s always service, price, and good looks). Most importantly, what standards can do is set a foundation for market expansion. Without standards, imagine how the businesses of music, air travel, or wireless would have fared. In the business of display advertising, industry-wide standard measures of audience and inventory quality could usher in a new dawn of transparency and send the rats and raccoons packing.
Let’s take a closer look at what’s happening in one corner of the digital ad verification world, called “ad viewability”.
With the rise of ad exchanges, advertisers love the ease at which they can surgically locate and buy the audience segments they want, whereverthose users happen to be. Problem is, as a side-effect of all this efficient buying, advertisers have lost the warm fuzzy of knowing the context where their ads are showing up. They need to know: What content is my ad next to? Where is my ad on the page? What kind of site is this anyway? In the case of viewability, is my ad even being seen by an actual human for any length of time?
These concerns are so acute that a sub-industry has emerged in the area of ad viewability. A trade group consortium comprised of members of the venerable 4As, ANA, and IAB have formed to create the Making Measurement Make Sense initiative (3MS)to study and fix the problem of uniform transparency for advertisers. Atlas is an active participant in the 3MS. A high-profile aspect of the 3MS charter is concerned with ad viewability. To address this, the 3MS members proposed a simple rule to determine if an ad was seen, reasonably unobstructed, for a reasonable amount of time. The 3MS worked with the Media Ratings Council (MRC) to define some guidelines for using the rule to measure viewability in the wild.
Over the first half of 2012 the 3MS leadership organized participating publishers and ad tech companies, including Atlas, to run live campaign tests using the tentatively proposed method. The results came back and uncovered two important insights. First, that a significant portion (36% - 87%) of the inventory bought and sold today is not visible (the numbers varied significantly by inventory source and by vendor implementation). Second, that measuring viewability is really hard to do universally well. Different environments, browsers, devices, user settings, and the dreaded iFrame issue make it very challenging to consistently get good viewability readings on over 25% of the total volume of impressions (again, the numbers were all over the place). The MRC themselves have declared the proposed viewability standard not-ready-for-prime-time in a recent industry advisory.
Even if the implementation of viewability were easy, there’s also the issue of market adoption. The basic idea sounds straightforward enough, right? But, consider what constitutes an ad “impression” today – that the server got a request for an ad. Tens if not hundreds of thousands of publishers book their ad revenue the moment their servers get a request for an ad. Now, when the revenue manager at myadsupportedsite.com can’t book his revenue until an actual human sees his ad, he’s going to be thinking, “holy TiVo, who moved my cheese?!” The de facto impression standard has been in place for well over a decade, long before any of the modern business models were around. So, there’s also a lot of inertia to overcome. Incidentally, if and when a viewability standard does come to pass, instead of plummeting publisher revenues, expect to see quite the opposite. The more predictable outcome, as many others have blogged, is that quality inventory will become more certifiable, and that will spur advertisers to pay more for that quality. Supply and demand says that when you constrain the supply of a valuable commodity, such as visible inventory on quality sites, the rates must go up. As throughout the ages, sellers of quality inventory will be just fine.
In the meantime, the lack of a gold standard isn’t stopping the army of verification vendors from selling flavors of the not-yet-ratified measurement method. Often these viewability services are marketed as part of a broader package of verification and brand engagement solutions. The good news is the awareness brought about by these solutions is helping to keep the spotlight on the need to get a reliable standard of transparency. But until a standard is ratified and these services can be compared side by side, buyer confidence won’t hit a critical mass and publishers and networks will continue to push back hard on the prospect of selling against what remains an undefined currency.
So, is viewability a great idea with no real path to become the gold standard for the industry? The 3MS-ers haven’t given up hope. The members of the consortium have turned their focus to a new proposed technical solution that would make measuring ads in a web page more reliable while at the same time protecting the page and the user from ad-borne threats, the so-called “Safe iFrame” initiative. Like most other proposed technical standards efforts aimed at our highly fragmented industry, this ambitious initiative will require significant energy to overcome the current inertia. But it’s not impossible.
Growing Online Depends On Transparency
For tech players like ad servers, exposing more sophisticated metrics and snapping to new rules for counting and billing will be an expensive investment. But even more so it is an opportunity. We have to remember that the promise of accountable media was the spark that lit the fire in online display in the first place. And we’re already seeing renewed investments by the ad tech titans to upgrade our decade-old measurement stacks to get ready for the rigors of modern media buying and consumption patterns. Specifically, it will be critical to generate comparable measures of transparency across the vast array of consumer devices and not be foiled by blind networks and exchanges.
As the measurement industry continues to mature, some technology stratification will be inevitable. Basic modern accountability measures will become a table-stakes feature and will infuse the entire ad tech landscape in the form of simple URL scoring, basic viewability, and coarse-grain audience makeup. In contrast, highly specialized measurement services will also thrive, selling their sophisticated metrics at a premium. These advanced measures will go above and beyond the baseline standards and will include measures of user engagement, brand sentiment, content analysis, and placement value not available from their ad tech cousins.
Advertisers will continue to hold back online if they believe it’s overrun by rats and raccoons. The key to growing digital in the age of audience buying is reintroducing brand advertiser comfort and control around where they are showing up. If our industry can renew its focus on transparency and rebuild brand trust that we can ensure high quality ad placement, then we’ll all sleep better at night.
Group Channel Partner Manager
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