Can transparency actually come to ad tech?

“This is programmatic 2.0 This is the future."

One of the criticisms levied against ad tech is that it’s designed with opacity in mind. Sure, the frame from the beginning was that programmatic platforms would make media buying more efficient than traditional buying, but transparency was never a feature baked into the product. 

All the way back in May (side note: time is belligerent these days; Reuters has a great interactive piece on what the pandemic has done to our sense of time), we learned just how opaque ad tech is after a report from Incorporated Society of British Advertisers (ISBA) and the Association of Online Publishers (AOP) and PwC found that 15 percent of a programmatic ad spend just disappears. Poof.

Earlier this week, Campaign reported that Omnicom Media Group took its Marketplace programmatic platform out of beta. OMG Marketplaces boasts, according to Campaign, that it can eliminate “the amount of money that disappears into the unknown in the notoriously murky digital advertising supply chain.”

From Campaign:

By isolating and reducing technology fees that are typically integrated into the supply-side process, OMG says it can increase the portion of clients' programmatic budget that makes its way to media owners, thus increasing the "working media" component of a programmatic buy. This, in turn, should allow for online advertising to reach better-quality media and for media buying to be more efficient.

OMG Marketplace also claims it’s 100 percent transparent. 

Here’s how OMG Marketplace works, according to Mia Mulch, deputy managing director at “OMG Programmatic. Speaking to Campaign, she said that Marketplace has:

three pillars that operate together: SSPs are directly contracted by OMG (via Xandr); publishers are paid directly by OMG instead of sequential SSP publishers; and a dedicated team at OMG curates custom publisher inventory. 

These measures, she said, have enabled OMG to double the matched rate of impressions that PwC was able to achieve in the report (11%), with 50% more budget going to publishers than what was shown in that report (49%).

“Something like this eliminates all the long tail because naturally the client and agency are selecting the publishers and are curating the marketplace,” David Nyurenberg, founder and CEO of Valor, a digital marketing firm, told me. “In doing so, there’s no middleman within the ecosystem. The pipes are directly between agency and DSP and publisher. As long as the implementations as to how they’re selling it, it’s a good thing.”

According to several ad tech experts, there seems to be two trains of thought: on the one side, it sounds like this OMG Marketplace is doing direct deals with publishers rather than letting the SSPs curate inventory, which lets them have more control and know the price the publisher is charging. They then can activate through Xandr, meaning they work with fewer SSPs.

Jordan Bitterman, CMO of TripleLift, a programmatic ad platform, tells me that it’s entirely possible that OMG has found a way to reduce waste in their programmatic buys through this test. He said that the test OMG highlights—an 18-month trial with the UK’s Government Communication Service, for which, according to Campaign, MG OMD created a custom division and “was able to reinvest 12% more working media that the current programmatic system would enable. It has already brought on board 10 "’major’ UK media publishers”— is the key that they are “directly contracting” for the inventory. (The platform was developed with the UK government.)

Bitterman’s company has a horse in this race, as a) OMG is a client, and b) his company contracts all of its inventory directly with publishers. TripleLift, he said, was built on the premise that it isn’t offering resold inventory from another exchange as part of its buys (which happens all over the industry). And that is at the heart of Supply Path Optimization.

“We believe that's where this waste generally comes from: resold impressions,” he said. “It's a stain on programmatic.”

Others aren’t as optimistic about the notion of an agency trading desk saying it has 100 percent transparency.

Dr. Augustine Fou, noted ad fraud investigator, broke some of this down for me. For starters, looking at the percentages Mulch boasts, it appears it’s an incremental jump, if anything: doubling the matched rate of impressions from the PwC report looks like it means going from 11 percent to 22 percent; and it was only an increase from 49 percent to 50 percent of budget going to publishers.

Fou also has some reservations about the editor’s note appended at the bottom of the article that said: “This article originally reported OMG Marketplace reports a 5% "unknown delta", when it is 0%. The 5% discrepancy is based on OMG's own audits of the supply chain that it has carried out since 2017.”

It’s akin to agencies’ claims of the “walled gardens” of the platforms “grading their own homework.” 

“(Agencies) coined ‘walled gardens’ to smear Google and Facebook because of selfish motives,” Fou told me. “Every dollar spent with Google or Facebook directly is a dollar less spent with the agencies.”

And this, Fou says, is at the center of programmatic’s challenge. For years, agencies harped on Google and specifically Facebook for not letting 3rd party measurement tags measure for things like viewability. 

According to Fou, agencies said that to imply there was fraud or viewability issues in Facebook in an attempt to convince clients to spend more with them (the agency) instead of with Facebook and Google.

“And the agency would conveniently trot out viewability reports that showed high viewability and fraud reports that showed low fraud,” Fou told me. “One of the key points is that each walled garden must be thought of in two parts: on Google vs off of Google (think: Google Display Network, or Search Partners) and on vs off Facebook (FAN - Facebook audience network).” 

The aspects that are off Google and Facebook are full of fraud because those sites can increase their own ad revenue by using bots, Fou said. 

“If marketers JUST limited their ads to google's main property only (turn off GDN and search partners) and Facebook itself (turn off FAN) their marketing would be awesome,” he said. “Search ads work well. Display ads on Facebook work really well.”

That said, clients still have to spend with Google and Facebook and Apple and Amazon. That supply is not independent of SSPs; what Omnicom seems to be doing is making their programmatic buying more streamlined to get greater transparency with the result of having to go through fewer SSPs rather than the more than 20 they usually have to go through. On its surface, this makes sense. Needed, even. 

Fou isn’t quite convinced. 

“Don’t forget, (agencies) were caught giving kickbacks to themselves,” he said, “and their trading desks were set up to rip off their OWN clients with eyes open.”

Fou is referencing the 2016 ANA report that found “Numerous non-transparent business practices, including cash rebates to media agencies, were...pervasive in a sample of the U.S. media ad-buying ecosystem.” 

Another source told me that they’re dubious that OMG Marketplace is getting 100 percent transparency into the fees of the SSP, arguing that no business should reveal all the mechanics of how they make their money. I can’t imagine OMG revealing all of it to their clients, or a publisher revealing it to all ad buyers, or a large retailer telling you what their take is on kids shoes, for example. 

Others, however, think something like OMG Marketplace is moving the industry in the right direction, as trading desks like Xaxis are still non-disclosed. Meaning that if the Omnicom model can offer up full transparency into publisher costs, management and tech fees, this is exactly what brands are asking for when it comes to the removal of opacity surrounding OpenRTB

“This is programmatic 2.0 This is the future,” Nyurenberg said. “I assume the next step: try figuring out how to activate against first party data. It’s not cookie based data, so by building this marketplace they’re setting themselves up for a cookieless future.”

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