Data Ownership Can Help Marketers Avoid The Next Bid Caching Debacle

Ka Mo LauData-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Ka Mo Lau, chief operating officer and chief financial officer at Thunder.

With the recent uproar over bid caching, where an exchange enables a losing bid in one auction to win an ensuing auction, marketers realized they may not have gotten what they paid for.

Of course, such revelations are nothing new to the ad tech industry. Facebook infamously admitted to 10 mistakes with its measurement over the course of a year.

Demanding transparency and accountability is the best way to stop future scandals. This means marketers must own their own advertising data – not just views of fancy dashboards or pivot tables, but the actual raw data in the form of impression logs, raw cost data, bids and smart contracts.

When marketers retain physical control of historical data, they create an indelible, persistent audit trail to look back on past behaviors and discourage vendors from cheating.

This is the same approach the SEC follows to catch people doing insider trading. The raw data of stock bids and sales become the records that investigators comb through to catch nefarious activity. In a similar vein, many marketers are part of organizations that perform regular financial audits to ensure compliance with accounting standards and prevent fraud. Yet marketers haven’t evolved to an auditing mindset to account for every penny of their marketing spend.

Owning the data a marketer paid for seems obvious, but it flies in the face of the continuing efforts by large ad tech players to raise their garden walls.

With the introduction of the EU’s General Data Protection Regulation and the California Consumer Privacy Act, publishers are becoming increasingly reluctant to share data in order to minimize their potential legal exposure. No one wants to be the enabler of the next Cambridge Analytica.

While these concerns are valid, the desire to sacrifice transparency and auditability is not.

Checklist for accountability

What does the balance between privacy and transparency look like?

First, marketers should contractually retain transactional data ownership on a log level, but only in a privacy-safe manner. Transactional data describes all purchasing and auction inputs: the types of data the supply-side platform (SSP) shares with the demand-side platform (DSP) and that the DSP should share with the advertiser.

This includes, but is not limited to, data related to impressions, creative, media and identity. To protect user privacy and prevent data leakage for publishers, the identity layer should be hashed and PII discarded.

Marketers should also promote the adoption of technologies that make ad dollars trackable across the supply chain. Experimental blockchain technologies show a lot of promise in creating a permanent, traceable record in which each party declares their value-add and costs in the transaction so numbers will add up or be flagged for auditing.

Marketers should bring in secure data onboarding or clean-room providers to match consumer transaction and conversion data to their ad impression records. As a result, they can verify if their customers actually viewed any ads along their conversion cycle, or if the audiences sold to them as likely intenders or the right target reflect reality based on their own customer data.

Marketers should retain data at the most granular impression level possible indefinitely, just as the SEC does. The cost of storage has decreased so dramatically that even terabytes of stored data should not be cost-prohibitive. The cheats of today may not be detected until sometime later, so a comparison data set needs to be maintained. Long-term data retention sends a strong signal to potential cheats that their schemes will eventually be uncovered and they will be held accountable.

Marketers also need to amend the standard IO to allow for makegoods for impressions that didn’t meet their needs. The time horizon for makegoods needs to be extended to cover nefarious behaviors that emerge in the future.

What’s the next step?

Ad transparency is increasingly necessary to show advertisers who was given what ad, when and where; otherwise, advertisers will keep being blindsided by revelations in their media supply chain.

Marketers who want to be proactive about avoiding the next scandal must get serious about data ownership and retention. They need to demand accountability and transparency. This starts with being judicious about how marketers spend their ad dollars.

Follow Thunder (@MakeThunder) and AdExchanger (@adexchanger) on Twitter.

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