Interviews, insight & analysis on digital media & marketing

Why programmatic was always going to fall short on transparency

Programmatic advertising can be, and has been, incredibly beneficial to the stakeholders within the ecosystem, but it’s also incredibly expensive for advertisers – and this is just one of the major issues. Alongside the costs associated, programmatic struggles a great deal when it comes to transparency as well.

In any programmatic transaction – other than the advertiser and the publisher at either end – you’ve got your SSP, DSP, measurement, viewability, and anti-fraud partners, to name a few. All of these parties gain a piece of the ad spending and benefit from however much money the advertiser is investing. And this number of players is hugely damaging to transparency. But a single solution between the advertiser and publisher could be the answer.

Disappearing act

According to ISBA’s ‘Programmatic Supply Chain Transparency Study’, an advertiser’s spend breaks down into publisher revenue (51%), agency fees (7%), DSP fees (8%), demand-side technology fees (10%), SSP fees (8%), and supply-side technology fees (1%), with the remaining 15% seemingly disappearing off the face of the earth.

“The reason why this problem is hard to solve is that the cause doesn’t lie in one place or with one player in the programmatic ecosystem; it is the ecosystem as a whole” says Stian Remaad, co-founder and CEO of Adnuntius.

Remaad compares the ecosystem to a game of pinball, with ad requests being bounced between various systems and certain events getting lost on the way due to, among other, a lack of standards. These events that are lost between platforms is where it’s believed the ‘missing’ 15% ends up vanishing.

“If we’re going to solve this problem, we need to provide a system that reduces the intermediaries and can actually mediate the entire auction inside of one walled garden, as opposed to having this, theoretically very positive, open ecosystem that, in reality , doesn’t work,” suggests Remaad.

This is something that some of the big agency groups have also identified and began working on. In particular, they have looked to shorten the value chain through what they call ‘curated marketplaces’. 

These marketplaces, according to Remaad, are “more transparent, because there are fewer systems in the middle to dust the whole intermediation”.

Seeing clearly

The Adnuntius platform – which is offered as a ‘white label’ solution – works in a similar way to these curated marketplaces. It consists of a private marketplace, self-service advertising, a data management platform, and an ad server. 

The combination of solutions mediates the relationship between the advertiser and publisher without the need for any other stakeholders in the process, meaning full transparency as the ad request only has to pass through one platform.

Whether it’s a curated marketplace or Adnuntius’ own platform, these solutions enable agencies to allay the concerns of advertisers who are unhappy about the costs and lack of transparency within programmatic. 

“Regarding the report on transparency and costs, they were getting a lot of pressure from advertisers to find alternative models for buying publishing inventory that wouldn’t suffer this kind of loss. Because, while it’s really bad for publishers, it’s not good for advertising clients either, as they want to see as much of their budgets as possible go into media buying,” Remaad explains.

In the case of the Adnuntius platform, agencies which deploy the marketplace solution are able to eliminate the majority of the technology costs associated with programmatic and “can also eliminate the 15% that looks quite embarrassing for any agency that wants to be transparent and honest,” says Remaad.

“We are responsible for making sure that there are no disappearing events or requests going over from the publisher’s side to the buy side.”

Having this single platform at the heart of the ad buying process ensures not just transparency and reduced costs, but also that any data shared is truly protected. A less crowded, more transparent ecosystem benefits advertisers, publishers, agencies, and consumers alike, and is something that should be given strong consideration.

“We are arguing that we should respect privacy and respect the possibility for publishers to monetise their data – and add a premium to their property – through an ecosystem that allows for both of those things, rather than keep having things happen non-transparently,” Remaad closes.