In A Tag-Based World, Deal ID Takes Center Stage

alex123Alex Merwin is Director of Programmatic at SpotXchange, the trusted video advertising platform for premium publishers, connecting them with advertisers, agencies, trading desks, DSPs, ad networks and traditional media companies to ensure they achieve maximum revenue for their inventory. This is Alex’s first contribution to The Makegood.

Programmatic and RTB have spawned a host of industry protocols, terms and acronyms but one of the newest, most important is Deal ID. Deal ID is a targeting token associated with a direct arrangement between a buyer and seller that enables a programmatic direct deal, such as a private exchange.

Publishers like Deal IDs because they allow them to set business rules for buyers (DSPs, ATDs, or client direct) based on inventory access, rate and priority. For buyers, Deal IDs help them access inventory historically only available through the upfront markets (ad networks or publisher direct) while leveraging the benefits of RTB buying which have changed the game the past several years.

Deal IDs have been widely used in display for some time but adoption within the video ecosystem isn’t nearly as advanced. Unfortunately, many of the programmatic direct deals within video advertising are executed using ad tags, which are operationally intensive and ultimately discourage DSPs from entering into private exchange environments.

“Deal IDs are a real step ahead for the industry; looking back to doing deals within private exchanges two years ago were significantly more challenging because you’d see different rules and definitions. By standardizing and streamlining the process, Deal IDs give brands and agencies we work with a lot more flexibility around automating and optimizing budgets,” commented Maria Martinez Diaz, Senior Manager of Business Development at DataXu.

With a tag-based execution, if a trading desk wants to run programmatic direct deals with five different publishers, they would have to create five different tags to facilitate the deal with the DSP, which creates issues for both publishers and buyers. This manual task creates exposure points for trafficking errors. Also, each individual tag has to be daisy chained through the publisher’s ad server, increasing latency and killing user experience.

However, with Deal ID, it would be executed using the DSP’s existing RTB integration, where the five private exchanges leverage a single tag (the DSP’s bid endpoint) and five different identifiers declared in each of the bid requests for each private execution. This decreases latency, margin for error and operational costs.

To summarize the benefits of Deal ID over tag-based programmatic direct executions

  • Tags are daisy chained. And there’s no arguing that this increases latency & abandonment rates; bad news for advertiser’s win rates and publisher yield.

  • Tags aren’t RTB enabled. Buyers pay a fixed rate. If they pay a dynamic CPM, reporting is through a third party UI and tedious to reference. But with Deal ID, buyers can take advantage of dynamic pricing and reference clearance rates in their own buying platform.

  • Tags aren’t transparent. Publishers can’t validate what advertisers or trading desks are running behind the tags so essentially they have to take someone’s word for it. Not so with Deal ID – publishers gain insight into the exact buyers running behind their deal.

Some in the industry have expressed concern that Deal IDs limit scale and may result in additional costs for publishers but there are tools in market that offer increased transparency and can quell those concerns. Look for platforms with Deal ID support that provides brand advertiser-level transparency into spend and bid activity within the deal. This type of actionable insight allows publishers to block or create individual price rules by advertiser, which means publishers can use Deal IDs to get the best price for their inventory.

The appetite for programmatic shows no signs of slowing down and Deal ID’s traction in the display industry has been impossible to ignore. It’s time for the video industry to shift away from tags, invest in Deal ID integrations and offer the level of transparency needed to make programmatic direct a success.