“The Sell Sider” is a column written by the sell side of the digital media community.
Today’s column is written by Stephen Johnston, founder and CTO of PubWise.
As technology and industry self-regulation converge to make supply and demand path optimization more seamless and efficient, we need a better name to describe optimization across the advertising ecosystem. I’d like to submit for your consideration a new term: advertising logistics.
The idea stemmed from my work with Prebid.org during the early days of header bidding. At the time, we were limited to basing campaign optimization strategies and algorithms primarily on intrinsic data such as ad size, placement, and price.
As new datasets like ads.txt and schain emerged and more data became available, suddenly we could record every bid request and its related transactions. As we incorporated these new extrinsic variables into the development of more sophisticated machine learning algorithms and optimization schemes, the ability to collect, observe, share and manipulate data began to resemble how physical items move through traditional logistics delivery systems.
Thus, advertising logistics. I define this as the organization, management and reporting of impression delivery and transaction data in a manner that is observable and can be optimized from source to consumption throughout the digital advertising supply chain.
A layer of observability
The operative word is “observability.” As Andrew Casale points out, an efficient programmatic ecosystem depends on accurate price discovery and transparency. But transparency only reveals what happened, not what can be done about it. We also need to understand why the value is what it is, which requires observability. Unlike transparency, observability informs how to take action on a data point, not just the knowledge of its existence.
Consider the level of detail available as a package makes its way through the UPS system. Anyone can enter the details of a shipment, which generates a tracking number that offers visibility. From the point of drop-off to the distribution center to when it’s on a truck for delivery, the package is scanned at every location, giving both the sender and the recipient confirmation of its whereabouts. On the rare occasion when a package does get lost, there’s a time-stamped history of everyone who touched it and a process for getting it to its intended destination.
Imagine the level of accountability that a similar process would create for programmatic advertising.
At every server time-out, the risk of spoilage would be readily identified. The holy grail of transparency would be established. The “ad tax” fees taken from tech vendors who contribute little would give way to those who consistently prove their value.
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All advertising data is either intrinsic or extrinsic. Intrinsic data represents the static, innate qualities of the ad – things like floor price, size of the unit, position on the page, geotargeting, price and user ID. It largely encompasses how optimization has been handled historically.
Extrinsic data, by comparison, includes the transactions that occur as each bid request and impression progresses through the supply chain – variables like identity, seller-defined audiences, first-party data, budget, spend, value, context, ads.txt and schain. It provides the observability required to take action.
A philosophical shift
As we move into a new era of observability, improved automation and better methods for tracking and identity resolution, advertising logistics gives us a common language. It enables us to incorporate intrinsic and extrinsic data into each of our own systems and to institutionalize its importance industry-wide.
Advertising logistics is not a new company, service, protocol or product. It’s simply a description for how everything we do gets transported across the advertising supply chain. Technically, all of this is possible today. But culturally and philosophically it may take some time to implement. It’ll be a while before observability and advertising logistics become baked into ad servers, header bidding wrappers and OpenRTB protocols.
Working together, we can create a more sustainable, well-lit programmatic ecosystem that will someday see our industry become as efficient, accountable and fortified as the world’s most advanced business supply chain logistics systems.
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