These Ad Exchanges Are Calling for a More Transparent Programmatic Marketplace

U.S. programmatic advertising spend is predicted to near $70 billion by 2020. But despite such growth projections, concerns remain among advertisers—and the key umbrella term encapsulating such doubt is transparency.

The issue of transparency is raised time and time again in the ad industry’s public discourse, with the application of automated ad tech raising concerns around brand safety and viewability as headlines over such matters grow in frequency in the mainstream press.

In recent weeks, ad-tech specialists have publicly debated more niche aspects of the transparency debate, like auction manipulation, leading to much finger-pointing. However niche they may seem, the issues at hand affect all those involved in programmatic trading. With almost 80 percent of all U.S. display ad dollars spent using such technologies, providers of such technology are eager to show buyers a clean pair of hands.

That’s why the CEOs of several ad exchanges—OpenX, PubMatic, Rubicon Project, Sovrn, SpotX and Telaria—have all signed their names to an open letter pledging to follow three core principles with ad auctions on their ad exchange.

The open letter, entitled “Principles for a Better Programmatic Marketplace,” includes three core tenants: efficiency, transparency and fair-market values. These are geared towards “maximizing participation in programmatic advertising.”

All six CEOs have pledged “not only to these broad principles, but to the measurable and verifiable actions necessary” to ensure the enactment of the proposals laid out in the letter, which they claim will generate value for all sides of the market.

The principles will be taken up by the Trustworthy Accountability Group (TAG), an ad-tech body geared toward promoting transparency in the digital marketplace. TAG will then consult its wider membership before eventually codifying said proposals and devising a means of enforcement.

The components of each of the tenets laid out in the letter are discussed below:

Efficiency

Quality assurance: All ads in an ad exchange are to scanned for malware, inventory for brand safety and invalid traffic, as well as third-party verification.

Transparency

Fee transparency: Ad exchanges must only charge one clear fee per auction, with all participants open to audits of their inventory supply chain and how they choose winning bids.

Fair-market values

Clear auction rules: Changes to an ad exchange’s auction mechanics, including first or second price auctions, must be clearly communicated upfront, with no undisclosed business arrangements such as rebates.

Tim Cadogan, OpenX, CEO, told Adweek that the aim of the initiative was to reduce friction, increase trust and improve liquidity in the market.

“This is the first time you’ve had a group of exchanges that have come together and planted a clear flag for the fundamentals of what we do, which is run markets,” he added.

Walter Knapp, Sovrn, CEO, described the move as a means of “mainstreaming programmatic marketing,” adding that the first step of the journey is holding themselves up to the same principles.

“The idea was, if we come together with a set of clear principles that everyone could rally around, the buyers could have trust. Then, it would engender trust in the marketplace and therefore expand the overall pie,” he told Adweek.

In a statement, Mike Zaneis, president of TAG, added that the principles “raise the bar for how exchanges operate and will ultimately make programmatic a better space for advertisers and publishers.”

“These companies are investing in a better future for digital advertising,” he continued. “TAG looks forward to working with the broader industry to take these principles and develop a new certification which will ensure brands, agencies and publishers that their partners are committed to a fair, efficient and transparent programmatic supply chain.”

Ronan Shields

@ronan_shields

Ronan Shields is a reporter for Adweek, focusing on ad-tech.