Tag Archives: AdExchanger

Try This Quick Programmatic Digital “Transparency” Test

26 Feb

exam resultsIf you’re like most marketers, your organization is spending considerably more of its media budget on programmatic digital media today than it did last year and certainly more than it did five years ago. The question is, “Are you getting value for that shift in media spend?

While agencies and ad tech firms have clearly benefited from the rapid growth of programmatic digital media many marketers have seen their working media levels languish due to the third-party costs and intermediary fees associated with programmatic media.

As marketers know all too well, every dollar invested programmatically is subject to what has been referred to as the “tech tax,” which according to David Kohl, CEO and President of TrustX this can account for over fifty cents of every dollar invested. In his article; “The High Cost of Low CPMs” written for AdExchanger, Mr. Kohl points out that “whether or not the ad reaches its target audience and whether or not it is served into the viewable window or below the fold, DSPs, SSPs, data providers, viewability and verification providers, tag managers, re-targeters and others all take their few cents.”

The question to be asked is; “To what extent is this happening to my organization?” Fortunately, there is a quick, three-step method for testing your risk profile when it comes to programmatic digital media.

Step 1 – Ask your accounts payable department to provide you with a few examples of the digital media invoices that comprise the billing from your digital media agency partners. Check if they have a description of the services provided and the type and level of media inventory purchased. The objective of this exercise is to determine whether the invoices are highly descriptive or general in nature and if a non-media reviewer would be able to ascertain the breakdown of “what” was actually provided for the amount being billed.

Step 2 – Review the third-party vendor invoices that accompany the billing from your agency. If supporting vendor documentation is not provided, ask your agency to provide detail for a handful of invoices. This detail should include the invoices from the actual media sellers, not the agency’s trading desk or an affiliate. Apply the same filter to your review of these invoices as you did for the agency’s billing, with regard to the adequacy of the descriptions breaking out the media purchased and all of the attendant costs (i.e. net media expense, agency campaign management fees, ad tech and data fees, etc.).

Step 3 – Evaluate both sets of invoices, agency and vendor, for an itemized list of the fees being charged such as:

  • Agency campaign management fees
  • Data fees
  • Pre-bid decision making/ targeting fees
  • Ad tech/ DSP fees
  • Publisher discrepancy fees
  • Ad verification fees
  • Bid clearing fees
  • Ad serving fees

If you find that invoice descriptions are less specific than you would like or that third-party vendor invoices don’t contain an itemized list of fees being charged, it is time to have a conversation with your agency partners.

The first topic to be discussed is establishing your position and preference for “How” your programmatic media buys are to be structured when your agency goes to market on your behalf. If it is transparency that you seek, they should be executing your programmatic buys on a “cost-disclosed” rather than a “non-disclosed” basis. This is the only way that you will be able to identify the net costs being assessed for the media inventory purchased and to calculate what percentage of your buys are going toward working media. Fraud and viewability concerns aside, advertisers have found that after fees are subtracted, they’re lucky if 50¢ of a dollar spent on programmatic digital media actually makes it to the publisher to fund the media that your consumers see.

Once you and your agency have agreed on the desired level of disclosure, conversation must necessarily turn to the need for updating client-agency agreements, statements-of-work and each of the media control documents utilized by the agency (i.e. media authorization form, electronic RFI templates, digital insertion orders, etc.). In spite of the ad industry’s efforts to reform what remains a murky digital media supply chain fraught with bad actors, questionable practices and a lack of transparency, advertisers remain at risk. Therefore, it is imperative to ensure all parties are held accountable that they employ the appropriate descriptive invoice detail, reporting requirements and itemized cost breakdowns mandated by the advertiser.

Testing the current state of your programmatic buys’ level of transparency is a necessary first step to stripping away the opacity that can surround digital media buying. In turn, the results of this self-examination will assist advertisers in both safeguarding and improving the return on their digital media investments. In the words of David Ogilvy:

“Never stop testing, and your advertising will never stop improving.”

Can the News Get Any Worse for Digital Advertisers?

21 Feb

digital media fraudTwo articles published on February 18, one by Reid Tatoris in Marketing Daily which asserts that when it comes to online advertising there are “only 8% of impressions that have an opportunity to be seen by a real person” and the second by Joanna O’Connell, Director of Research for AdExchanger questioning the transparency of programmatic media buys, should raise the hackles of anyone playing in the digital media marketplace.

Mr.Tatoris begins his argument by correctly establishing the Interactive Advertising Bureau’s (IAB) definition of an online ad impression:

A measurement of responses from a web server to a page request from the user browser.”

Based upon this industry accepted definition he suggests that an impression “does not equal an ad opportunity” and proceeds to profile a number of items which can derail the process, most notably the fact that “60% of all traffic on the web is bots.”  Once again, it appears as though the industry’s prowess at trafficking digital ads has outpaced its ability to both measure actual audience deliveries and or to police the legitimacy of the thousands of “hundreds of thousands of websites” that exist today.

When you combine the ongoing concern about the efficacy of the digital advertising delivery with the transparency challenges associated with programmatic media buying, the risk to advertisers escalates. 

Programmatic buying integrates advertiser data with technology assisted processes and intelligence allowing advertisers or their agency trading desk partners to bid on inventory being offered on ad exchanges by publishers.  Automated buying, which often occur on a real-time basis, grew 75% in 2013 to $3.5 billion according to eMarketer and is likely to grow another 38% in 2014. 

There are numerous advantages associated with programmatic buying, including looking at impressions down to the individual level.  However, one of the perceived limitations is the lack of transparency in and around the caliber of the inventory being purchased and the price being paid for that inventory. 

Thus, in light of the impact of impression dilution between purchased and delivered suggested by Mr. Tratoris, and the concerns over the quality, if not quantity, of impressions delivered via programmatic media buys, an advertiser might legitimately ask, “What are we getting and what did we pay for it?” 

In spite of this dynamic, digital media continues to grow, representing approximately 25% of total U.S. ad spend in 2013 and, according to eMarketer, this could grow to 31% of total spend by 2017.  Rather than getting serious about enhanced measurement, improved transparency and fraud protection, the industry rallying cry seems to be “ready, fire, aim” with regard to the efficacy of this media channel and its audience delivery capabilities. 


%d bloggers like this: