Thinking About The Future Of Ad Verification

Verifying The AdThere appears to be good momentum in digital advertising for ad verification solutions, but where does it all end up?   Can a “point solution” evolve into a sustainable, long-term business within the ad technology stack?

I’d argue more “points” will need to be added – especially if these companies want to “exit.” But first, let us review…

A Brief History

When pure-play ad verification companies arrived on the scene nearly two years ago, ad networks and publishers rejoiced.

[Record scratch sound here!]

Hardly.  Agencies have been the happy ones.

As you may know, ideally with third-party ad verification solutions, agencies get to verify what they’re buying from ad networks and publishers as it’s stated on their insertion order (I.O.) agreements. For example, ad verification might confirm that a particular geographic requirement has been met (“target U.S. users only”) or that the context of the content in which an ad runs is deemed in or out of context.

Another benefit for agencies is that it allows them to say to their marketer client that they are insuring brand safety for the marketer’s campaign. With marketer’s hesitant to put their ad spend into digital, ad verification helps overcome the traditional mindset.

To date, it appears challenges still remain around ad verification being reactive rather than proactive. Rather than preventing an ad from being served before it hits a page, the technology may find out after the ad is served that it was an inappropriate placement. No doubt agencies want to prevent the phone call from the marketer: “I just saw my cell phone ad in a Gawker story about Brett Favre’s latest misstep.”

Of course, there may be no need to let the marketer know about verification results as agencies can just use it to address concerns with the ad network and/or publisher on the IO.

Also, there are challenges around false positives (“this wasn’t adult content! It was Obama at the beach!”). Considering the enormity and complexity of verifying across multiple variables of each page among billions of pages on the Internet, this might be expected at first. Still, it makes for tension in the agency-network/publisher relationship.

Taxation Without Representation?

Some networks consider the licensing of this technology as a “tax” as agencies require that that networks do deals with the verification firms and include the tech on the agency’s buy.  It’s a margin eater. Yet, it could be argued it helps facilitate buying as agencies feel more comfortable spreading their marketer’s dollars with the online ad networks and publishers. For networks, it’s been a rocky road as ad verification pricing varies and another layer of complexity is added in the network’s relationship with its client.

Also, ad networks, DSPs, whatever you want to call them, can often have their own in-house technology which helps them insure proper delivery for the client. Adding a third-party can be seen as repetitive if not annoying.

End Game

What’s the end game for the verification companies? How do they exit? Who’s going to buy them or do they just grow up, go public?

Its current “point solution” form is asking for a more sustainable business model beyond playing off the tension between –at its core – automated buying and marketer needs. As more players pop in to the verification market and further commoditize the offering, the market could dwindle.  And, exchange infrastructure providers like Google and Yahoo!’s Right Media have been circumspect of the tech as they believe they have their own ad verification systems in place and they’re worried about ad verification opening up channel conflict by exposing their participating publishers – this is a network worry, too. For ad verifiers, it may be time to go end-to-end!

It would seem that verification companies’ recent entry into the sometimes confusing world of privacy controls such as those outlined and approved by the Digital Advertising Alliance is one way to solidify and broaden the offering. A couple of the verification companies are moving towards this initiative in different ways.  Why wouldn’t they all do it?   -One less tag to incorporate for ad serving at the least.

The goal in ad verification has always been to become a standard. I’d suggest that they become an organization in the business of representing an array of standards (privacy controls are a start) and offer a broader, end-to-end solution.

By John Ebbert

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