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Demand-Side Platforms: The Supply-Side Transparency Wish List

Forbes Communications Council
POST WRITTEN BY
Vitaly Pecherskiy

According to eMarketer, programmatic (technology-powered) advertising accounts for 78% of all digital media in 2017, yet it is widely known that the programmatic ecosystem has many problems. To ensure the sustainability of this ecosystem, all parties on the supply side (publisher) and demand side (advertiser) need to take steps to address the transparency issues that lead to these challenges in the first place. Here’s a list of said challenges along with predicted solutions:

Demand-side platforms want supply-chain transparency.

It is widely agreed that having fewer middlemen means more value communicated between buyers and sellers. The advertising landscape is notorious for hiding the true flow of dollars from brands to publishers. One initiative that takes a stab at solving this problem is ads.txt, a simple solution that lets publishers communicate which supply-side platforms (SSPs) they work directly with. Adoption is picking up speed on the publisher side. Soon enough, we can expect demand-side platforms (DSPs) to aggressively verify publishers they access, cutting out all resellers that don’t work directly with publishers.

The current black box of SSP auctions will also start receiving attention. Because DSPs now access the same publishers from multiple exchanges, they can compare the winning bid price to bid price ratio and approximate whether the second-price auction has been manipulated. In 2018 DSPs will look even closer into what happens after the bid is placed to ensure auctions run as intended.

Demand-side platforms want placement transparency.

Not knowing where your ads run is shockingly common. While many DSPs are now 100% transparent about which domains they run on, much of the inventory is still covered up by the label “undisclosed.” This may have worked in 2012 when publishers wanted to hide the fact that they sell inventory programmatically, but in 2017 everyone sells ads programmatically. Ultimately, masking domains is harmful to revenue because advertisers no longer tolerate this kind of opacity.

OpenRTB 2.3, the most adopted version of real-time bidding, does not enforce the passing of page-level information along with ad placements. As a result, DSPs have to rely on viewability verification partners. They, in turn, have their own challenges: In-app viewability generally isn’t supported and native viewability is consistently unsupported across SSPs.

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In 2018, there will be a strong push for placement transparency reporting by SSPs. The winners here will be companies that adopt a buyer-first mentality and help advertisers buy inventory that drives results.

What can exchanges and publishers do this quarter to win in 2018?

In 2018, we will see more DSPs pushing exchanges to take on the responsibility of managing risk and compliance when it comes to traffic quality. The current expectation that DSPs validate traffic is outrageous given that DSPs hand over payment with the possibility of obtaining fraudulent placements. Would you order a pizza with your hard-earned dollars if you knew there was a chance that upon delivery, it would turn out to be made of cardboard? No, you’d boycott the place and stick to the joint that guarantees fresh ingredients every time.

For now, DSPs need to actively monitor their traffic to validate the information passed to them by exchanges so as not to take the entire hit on the costs associated with spoofed domains and unauthorized resellers. DSPs will get aggressive at cutting exchanges that pass a high volume of traffic flagged as risky. Further, buyers should be given the option to buy only from SSPs that will offer a full refund on any fraudulent traffic bought.

Going forward we will see a greater focus on supply-path optimization. Business will be centralized between key partners and publishers in order to prioritize effective business practices and develop relationships with a shortlisted group of exchanges. Ads.txt can offer a simple way to bring transparency to which exchanges are in fact certified to sell the inventory.