“The Sell Sider” is a column written by the sell side of the digital media community.
Today’s column is written by Christian Baesler, president at Bauer Xcel Media.
Technology has given average consumers a fantastic platform for product research and insight. From consumer reviews to public tweets about terrible customer service, businesses have to be much more cautious about the claims they make about their products these days.
Technology has not given digital media buyers and sellers the same advantage. Today, I see that many of the metrics that govern the digital advertising economy feel like the early days of retail, before there were ratings, reviews or objective government agencies to regulate quality and consistency.
The quality of digital advertising inventory is measured in many ways, be it by ad clutter, viewability, bots, ad blocking or any number of other aspects of a website that can be built into an algorithm. The problem is that algorithms are proprietary. While Moat might call one ad nonviewable or fraudulent, Integral Ad Science might say that it’s completely fine, or vice versa.
Various third-party technology companies are peddling opaque and variable data to advertisers and publishers, creating major problems for the market. Advertisers are hurt by the lack of scale and consistency while publishers are hurt because they are all treated as guilty until proven innocent, which can still create lasting harm to their brand. Both sides lose money while those in the middle continue to extract their advertising technology tax.
The Vigilante Problem
Fraud is a problem in the industry, and advertisers are right to try to eliminate it from their media budgets. The digital advertising ecosystem is so broken that advertisers and publishers don’t really know what they are transacting on, said Jim Spanfeller, ex-CEO of Forbes.com, last year.
But the wide variety of quality solutions in the market provides advertisers with a “do it yourself” version of quality control that is costly and not scalable for advertisers and publishers that want a solution that can work across screens, especially as TV comes into the digital market.
Advertisers have basically taken it upon themselves to regulate their own media plans. I understand that media buyers that buy on open exchanges across thousands of websites feel like they really are in a lawless land. But if they had a more reliable set of metrics to define quality and select premium quality environments to buy from, they could make better decisions rather than shift their blacklists and whitelists or negotiate make-goods on a daily basis as new problems pop up.
While the cybersecurity world shares intelligence data so that everyone can beat the bad guys, individual quality solutions operate totally independently in digital advertising. Advertisers should work with independent groups, including the MRC or IAB, to push individual quality and fraud companies to share information. This allows advertisers to have cleaner media plans and the industry to start creating quality standards that advertisers can feel good about and that publishers can use to develop their inventory products.
Money Talks, Publishers Walk
Vigilante-style quality control allows advertisers to call the shots in media relationships with publishers. When a vendor reports something that’s below standard, media buyers have absolute power to request make-goods, even if other quality vendors don’t report anything wrong for the same inventory.
This creates an incentive for advertisers to choose the vendor that reports a problem. It also leads to media buyers becoming overly cautious because they must justify to their bosses or advertiser clients if they made a compromise with a publisher based on vendor data that showed a problem.
The publishing industry needs to change the current state of total compliance and require a better approach, working with advertisers to create a transparent, shared definition of quality that the individual vendors must comply with. Fraud data should be pooled and shared by participants in the marketplace. Any problem reported by a third-party vendor must be corroborated by an additional third party, and publishers and advertisers should have a formal way to request second opinions and corrections.
Ideally, publishers and advertisers alike should have objective auditors working on their behalf to serve as a balance to the opaque quality metrics that govern the ecosystem today.