Programmatic has become almost synonymous with opacity.
Each platform has its own rules for running ad auctions, which means advertisers and publishers often don’t know what’s happening behind the scenes.
To shine a light into those black boxes, the Media Rating Council (MRC) released new standards last week for digital ad auction transparency alongside a new voluntary certification for platforms that adhere to them.
The purpose isn’t to force every platform to use the same auction playbook or a single algorithm, Ron Pinelli, the MRC’s SVP of digital research and standards, told AdExchanger.
Instead, the standards create a consistent framework for explaining how auctions work, Pinelli said, and push platforms to disclose their “key decision variables” for determining results, as well as any changes to their auction rules.
That said, platforms can’t get the MRC’s new transparency seal of approval if they don’t follow certain auction best practices, including adopting controversial OpenRTB specs and others the industry has been slow to embrace.
Fair play means knowing the rules
Platforms must disclose a long list of auction parameters to qualify for the certification.
They have to share whether they run first-price, second-price or modified second-price auctions and whether factors beyond bid price – like demand source priority or seller-defined rules – influence which bid wins.
Publishers and SSPs must reveal their use of reserve prices or pricing floors and apply the same floors to all buyers instead of setting different ones for different buyers.
Agency holdco Omnicom Media Group first lit the spark to create these standards together with the MRC. The two groups began assembling a steering team to guide the standards in 2024 and garnered support from nearly 70 companies and organizations. Participants include Meta, TikTok and X, plus a who’s who of top publishers, ad agencies and ad tech vendors – The Trade Desk and Hearst among them – as well as ad industry trade orgs the 4A’s, ANA, WFA and the IAB Tech Lab.
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Ben Hovaness, chief media officer of Omnicom-owned OMD Worldwide, has been deeply involved in the process – in fact, he’s been the driving force. He told AdExchanger the project arose from his fascination with programmatic ad auction theory – and his surprise at the lack of industry standards for disclosing how auctions work in practice.
Since 2014, Hovaness has run an internal ad auction education program and has collected official auction rule disclosures from major platforms, including Google, Meta and Amazon, for Omnicom’s Council on Accountability and Standards in Advertising. In 2023, he brought the project to the MRC with the aim of creating the industry’s first real standard for auction rules and change disclosures.
“It always seemed unreasonable to ask advertisers or agencies to place a bid in an auction where the rules are unknown,” Hovaness said. Not only is that setup bad for trust between advertisers and sellers, he said, “it also degrades the advertiser-agency relationship.”
That level of opacity would be unthinkable in traditional auction environments, Hovaness added.
“If you go to Sotheby’s or Christie’s, you get a term sheet at the door that says exactly how the auction works, how much the auction house is taking – all the associated fees and rules,” he said. “That is how you run a good auction with high integrity.”
More transparency into auction rules will let buyers and sellers check each other’s homework, Hovaness added, improving accountability between publishers and advertisers, as well as between brands and their agency teams.
Meanwhile, disclosing how auction logic works will also help both sides optimize their pricing and bidding strategies, said the MRC’s Pinelli.
Check your specs
To be clear, the MRC standards leave room for platforms to include proprietary rules in their auction logic – as long as they disclose them.
But there is a set of basic requirements that all platforms must meet. Hovaness described these as the bare minimum for eliminating inconsistent – and, in some cases “deliberately deceptive” – practices from ad auctions.
According to Pinelli, these requirements could also encourage adoption of updated OpenRTB specs promoted by the IAB Tech Lab – some of which the industry has been slow to adopt, while others have sparked heated debate.
For example, platforms must use only the new video.plcmt field for labeling and decisioning on online video ads.
The Tech Lab added video.plcmt to the OpenRTB spec in 2023 to create a clearer distinction between “instream” and “outstream” video ad placements. But many DSPs and SSPs still use the older, now-deprecated video.placement spec or both the new and old specs. The new MRC standards aim to get everyone to (finally) standardize on the new one.
Compromise on TIDs and GPIDs
Similarly, the MRC standards now mandate universal Transaction IDs (TIDs), in line with the IAB Tech Lab’s OpenRTB spec.
TIDs were at the center of a public dispute last year between Prebid.org and The Trade Desk after Prebid disabled them by default in an August update. (Prebid later relented and let pubs revert to universal TIDs, but still disabled them by default.)
Given that history, it’s notable that Prebid is absent from the list of contributors to the MRC’s new transparency standards. Prebid declined to comment on its nonparticipation.
But publishers needn’t worry that the MRC is favoring buy-side concerns, according to Pinelli.
The new transparency standards also require DSPs to submit multiple bids per auction, giving publishers more insight into bidding competition without duplicating bid requests or obscuring the TID to facilitate bid duplication.
The multi-bidding provision also serves as a compromise for requiring publishers and SSPs to include a Global Placement ID (GPID) – a unique identifier for each ad placement – in every bid request, Pinelli added.
Spurring adoption
But despite the MRC seeking wide industry involvement, Prebid isn’t the only notable missing player.
Google and Amazon – both dominant ad-buying platforms that also sell publisher inventory and often face criticism for their lack of auction transparency – didn’t participate either. Neither company commented in time for publication.
And, hey, it is what it is, according to Pinelli.
The MRC “can’t compel any organization to [participate],” he said. “Many organizations did not participate directly, but commented during the public comment period.”
Pinelli emphasized that participation is voluntary, and platforms will be reevaluated annually to ensure compliance. And the transparency accreditation is also completely separate from other MRC accreditations.
Next up, the MRC’s transparency steering team is planning to roll out a solution for mid- and long-tail publishers that don’t have the resources to go through the MRC accreditation process. The group is also working on new standards for incrementality measurement.
As for spurring industry adoption of the new standards – which is never easy – Hovaness encouraged advertisers, and especially larger brands, to reach out to their contacts at the major sell-side platforms.
“If there’s enough advertiser interest,” he said, “then this is going to move ahead.”
