The recent implementation of GDPR suggests that an increasing number of industries — including programmatic advertising — value transparency. MarTech solutions can provide clarity for agencies looking to clean up their end-to-end methodologies, says Kerry Bianchi, CEO, Visto
With a call at the start of 2017 for industrywide transparency, the programmatic ecosystem has made strides in meeting the challenge. But there’s still a long way to go, and the journey isn’t simple. After all, transparency can mean different things to different parties.
There’s contractual transparency, in which advertisers and agencies negotiate a benefit based on established goals. In fact, the World Federation of Advertisers found that 90 percent of advertisers currently review agency contracts to improve transparency and control.
Then, there’s transparency related to data and media execution. Accessing and acting on this information comes with its own challenges, especially when systems aren’t integrated or execution channels don’t share customer data along the sales funnel.
For omnichannel marketers, a holistic, transparent view into the inner workings of their media spend is the holy grail. Bringing those expenditures into focus requires implementing a martech strategy that is transparent and shines a light on every step of the omnichannel journey.
Fully Integrated Transparency
One of the first steps in developing a successful omnichannel approach is to define what transparency means to you. With media buying, the martech and adtech industry is rapidly evolving to meet the demands for transparency, but a lack of standard measures only adds to the confusion.
Tech providers need to work with industry associations such as the Interactive Advertising Bureau, the Association of National Advertisers, and the Media Rating Council to create common standards and classifications of transparency. This will ensure that participants in the programmatic ecosystem use consistent and accurate metrics for measuring performance. With the advent of the European Union’s General Data Protection Regulation, transparency into data sources, permissions, and usage is another highly scrutinized area requiring new levels of clarity.
Transparency will need additional focus around three areas in particular: contracts, impressions, and supply chains.
Agencies should educate clients on their trading practices, with a growing number making their fees transparent to eliminate doubt around whether they are acting in the client’s best interest. If the agency receives any benefits due to usage or spend volume, there should be agreement upfront about whether some, none, or all of those benefits will pass on to the client.
Advertisers would prefer not to pay for unviewed impressions. Some programmatic exchanges eat the cost of unviewed impressions to address this concern, but there’s still a need for more high-quality viewable inventory overall. Advertisers that aim to improve transparency can utilize open exchanges and private marketplace deals that prioritize viewability.
However, the issue then becomes how viewability is defined. According to IAB standards, at least half of an ad must be in view for at least one second, which doesn’t fly with everyone on the buy side. Buyers like GroupM require 100% of an ad be in view for at least one second. The industry must agree on not only the definition, but also the value of a viewable impression. On the opposite end of the spectrum, marketers need to determine whether it makes more fiscal sense to incur the often higher premium for a viewable impression or to accept a lower viewability standard in order to achieve a more reasonable cost.
Supply Chain Transparency
Related to cost is the ratio of “working” to “nonworking” ad spend, which is 58% to 42%, according to a survey conducted by the ANA. In other words, for every dollar spent, only 58 cents went to the actual media purchase. The remaining money went to technology and agency fees.
When making a media purchase, it isn’t uncommon for a budget to pass through as many as five parties before reaching the publisher. That’s a lot of fee layers for what seems like a relatively straightforward process. Requiring disclosure of fees along the supply chain from all vendors involved is one way a marketer can assess whether the incurred costs are worth it. Another is to use tools that offer comparative performance metrics to assess the vendor’s success in reaching the marketer’s goals.
The holy grail of media-spend transparency may not exist, but adding some of these tangible tactics to our best practices puts the path to transparency in our sights.
This article was originally published in MarTech Advisors 8/17/18.