Tag Archives: Adtech

Will Programmatic Ever Address Advertiser Transparency Concerns?

20 Aug

dreamstime_m_35343815It has been two years since the Association of National Advertisers released its study on media transparency issues impacting advertisers within the U.S. media marketplace.

While much has changed, there remain reasons for concern. Most perplexing is the fact that with all of the intermediaries in place between advertiser and publisher, few seem to be looking out for the advertisers’ best interests.

The reasons for this lack of an advertiser-centric perspective are many and include greed, a lack of knowledge, insufficient oversight processes and often times indifference up and down the programmatic digital media supply chain.

Thus, it was with great interest that I read a recent article on Adexchanger.com entitled; “Index Exchange Called Out for Tweaking Its Auction.” In short, the article dealt with the fact that Index Exchange had altered its auction processes, without notifying advertisers, ad agencies or DSPs. Ostensibly, the exchange’s motivations for this move was to boost its market share, although in fairness, they claimed that they believed their approach reflected “industry practice.”

Of note, Index Exchange made the aforementioned change more than one year ago, employing a technique referred to as bid caching. In short, bid caching is where the exchange retains losing bids in an effort to run advertiser content on subsequent content viewed by the consumer. From an advertiser perspective there are a number of issues with this practice, as detailed by author Sarah Sluis of the aforementioned article on Adexchanger:

  1. Buyers will bid higher prices for the first page in a user session. Thus, if the losing bid is retained and the ad is served deeper into a user session, the buyer will have overpaid for that inventory.
  2. Any delay between the initial bid and the ad actually being served, using a bid caching methodology, increases the chance that the DSP will have found the user elsewhere, resulting in the campaign exceeding the pre-determined frequency caps.
  3. Brand safety definitely comes into play, because even though the ad is served on the same domain, it is on a different page than what was intended.

What is truly remarkable about this scenario is that buyers just learned of this practice and, according to Adexchanger, “not from Index Exchange.”

How many advertisers were negatively impacted by Index Exchange’s unannounced move? What were their agency and adtech partners doing in the placement and stewardship of their buys that an exchange’s shift in auction approaches went undetected for more than one year? Unsettling to be sure.

Ironically, this exchange had implemented a similar move previously, adopting a first-price auction approach, which was known to publishers but not announced to buyers.

Advertisers would be right to raise questions about the current state of programmatic affairs; exchanges not notifying the public of shifts in auction methodology, agency buyers and DSPs unable to detect these shifts to adjust their bid strategies, ad tech firms not catching the shift to safeguard brand ad placements, and publishers that were aware, but settled for the higher CPMs resulting from the shift, rather than informing the buy-side.

This is disheartening news, particularly when one considers the percentage of an advertiser’s dollar that goes to fund each of their intermediaries (at the expense of working media). Yet, advertiser fueled growth in programmatic digital media continues unabated.

Clearly a case of buyer beware. Advertisers that have not already reviewed their supplier contracts or enacted the “right to audit” clauses of their agency and adtech supplier agreements may want to make plans to do so as they begin finalize their 2019 digital media budgets. As the old saying goes:

The buyer needs a hundred eyes, the seller but one.”

 

Big Data. Big Deal. You Bet.

5 Dec

digital trading deskThe evolution of media channels, ad targeting and the role of ad tech have significantly reshaped the media marketplace, allowing advertisers to select inventory and direct their messaging with an incredible level of precision. These developments have long been hoped for and yet, now that they are here, there is much that advertisers don’t understand about one important bi-product of the ad tech revolution… the disposition of the data gleaned from their investment at all levels of the media investment cycle.

In our contract compliance auditing practice, it is not uncommon that we find contract language gaps relating to issues such as:

  • Who owns the data?
  • Where is the data stored?
  • For how long?
  • How secure is the data?
  • Is the data kept separate from that of other advertisers?
  • Is your data being used to aid other advertisers?

These are important questions that heretofore have yet to be addressed by many advertisers within their agency agreements. “Big data” represents a potential treasure trove of information that can drive marketing strategy for advertisers by leveraging the insights gleaned from media transactional and customer behavioral data. That is, if and only if they are in receipt of the layers of data available to them and that they have the rights to use the data.

Rights to use their data? As odd as that may seem, data ownership is not automatically ceded to an advertiser. In spite of the fact that without an advertiser’s investment there would be no media buy and no corresponding data stream. Yet, many within the media chain have taken aggressive actions to claim that data as their own. Ad agencies, trading desks, publishers, demand side platforms (DSPs) and third party ad servers to name some of the entities that desire to own, or at a minimum, have unrestricted access to that data.

This jockeying for data ownership and access carries additional risks for advertisers in and around the topic of data privacy and security. Particularly as it relates to first-party data that may be utilized in the planning and placement of programmatic digital and addressable TV buys. Why? Because the unregulated, unsupervised use of an advertiser’s first-party data could be in violation of their users’ privacy rights.

Ownership and access rights to third-party data, which is often accessed on the advertiser’s behalf by its agency and or ad tech providers such as data management platform (DMP) and ad platform providers are generally clear and typically spelled out in licensing agreements between the various stakeholders. Then there is second-party data, which can best be described as information that users didn’t give you directly but was acquired through an advertiser’s relationship with another entity, such as an SEO platform or that was acquired via feedback from a behaviorally targeted digital display ad campaign. Advertisers must ensure that the use of and or sharing of second-party data is done in a privacy compliant manner to safeguard the interests of the user.

Complicated. Yes, and often little understood by those crafting client/agency agreements. It would certainly be appropriate for advertisers to revisit their agency agreements, with the goal of ensuring that their data ownership rights, privacy considerations and third-party access rights are clear and consistent in this emerging area. It is important to note that industry best practice templated language is still evolving and should not be relied on as an advertiser’s sole source for securing ownership/access rights and protections for agency agreements.

When it comes to advertiser data ownership, we share the beliefs of American businessman and politician Jim Oberweis, who stated:

“I am a strong believer that intellectual property rights need to be protected.”

Want to learn more about evolving your organization’s agency contract language? Contact Cliff Campeau, Principal at AARM | Advertising Audit & Risk Management at ccampeau@aarmusa.com.

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