AppNexus Reworks Publisher Contracts To Enable Fee Transparency For Buyers

AppNexus has been wanting to make its fees transparent, even before it was acquired by AT&T’s ad unit Xandr, but it couldn’t because of how contracts are written and structured.

But now, buyers can find out how much of their media budgets went to tech fees when they buy publisher inventory through AppNexus, a level of transparency not offered by any other SSP.

AppNexus first needed to get each publishers’ agreement in order to disclose its tech fees. After months of work renegotiating contracts with sellers, buyers will see fees disclosed for 82% of transactions in North America and 58% of transactions globally. AppNexus’ biggest partner, Microsoft, is among those disclosing its fees.

“We’ve felt for a long time, both at AppNexus and now at Xandr that marketers should be able to maximize their working media dollar,” said Ryan Christensen, SVP of product at Xandr. “There has been a lot of friction in the ecosystem preventing them from doing that.”

The initiative started in November 2017, when former AppNexus CEO Brian O’Kelley revealed to AdExchanger that its fees average 8.5% across its platform. In January, it partnered with Adobe Advertising’s DSP to make its exchange fees visible to their customers.

But AppNexus couldn’t add more granularity to fee structure because its contracts prohibited sharing that information.

Now that it can disclose fees on a per-seller basis, buyers can analyze fees for each publisher it works with. If an impression has been resold, it can see the costs that accrue with each extra “hop” between buyer and publisher. This new information can enable supply path optimization to find the lowest fees and fewest hops.

Showing fees is a growing imperative for ad buyers.

“End-to-end fee transparency is now table stakes for an IPG exchange partnership,” said MAGNA EVP of innovation Vincent Paolozzi.

While AppNexus couldn’t get every seller to disclose its tech fees – especially abroad, where there was more red tape – the vendor hopes this initial effort will spur more transparency in the near future.

“Once buyers see this is real, we hope they can nudge the sellers and help us get the rest of the way there,” Christensen said.

Buyers can see the fees in a couple of different ways. AppNexus will connect its fee information to transparency vendors AD/FIN, Amino Payments and Lucidity, allowing buyers to view fee information through them. And the AppNexus SSP is piloting native transparency reporting.

“In the future, a fee-transparent marketplace will become the standard expectation,” Christensen predicted. “Marketers and their agencies will be empowered to make decisions about where the media dollars go informed by where the fees are taking bites out of their spend.”

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