Insist on Three Types of Transparency in Programmatic

If anyone could point to a critical trend within the programmatic ad buying landscape, it’s transparency.  The term has been on the lips of most of the programmatic vendors pitching our agency lately, a dominant subject at recent programmatic conferences, and the subject of several opinion articles written over the past several weeks.

But there’s very little clarity being offered when it comes to transparency.  We can all agree that transparency is a good thing and that black boxes can be damaging, but we often find ourselves talking about transparency as a concept without really explaining what we mean.  And that’s not helpful to anyone thinking about bringing programmatic in house on the advertiser side, or potentially looking to an agency or partner in that regard.

In true digital industry fashion, “transparency” means different things to different people, but here are the three types of transparency you should insist on when planning for any type of programmatic ad buy, whether that’s through an agency trading desk, a DSP partner, and ad network or any entity that’s selling media it sources through ad exchanges:

Price Transparency

This is the big one – the type most advertisers think about when they hear transparency mentioned in the context of a programmatic discussion.  Most advertisers are used to understanding what they pay for media space, as well as the different forces that can affect that in various media.  For instance, rising paper costs can trigger minor cost increases in print, but if the cost of an insertion in People Magazine were to suddenly double from year to year, that would be a huge red flag to advertisers who understand media.

Digital is less affected by cost of goods, or other factors that tend to cause price fluctuations in offline media.  Moreover, efficiencies for digital ads are all over the place, meaning that it’s less clear what a benchmark CPM ought to be, given all the different ways digital can run in a targeted capacity.

Programmatic buying, particularly Real-Time Bidding (RTB), exacerbates this condition.  We’ve all seen the Display LUMAscape slide, and our big takeaway should be that there are a ton of companies between the advertiser and the consumer fighting for revenue, and that each of them represents an opportunity for the costs of your programmatic campaign to increase.  Moreover, the opacity of a black box might obscure the add-on costs and where they’re coming from.

It is impossible to get true price transparency from one end of the LUMAscape to the other.  However, it is possible to get transparency back to the exchange where ads are purchased, and you should insist on this.  You need to know what was paid for the media from the exchange.  The difference between that price and the final price is usually due to technology costs, data cost (for targeting) and other markups.  Insist on seeing the media cost on an impression-by-impression basis, as well as breakouts of all other costs contributing to the total price.  And make sure it’s auditable, much like you would have a clause in a contract with an ad agency to audit their books if you suspect them of earning undisclosed markups.

Data Transparency

As I mentioned above, it’s important to know how much you’re being charged for the data used to target your ads.  But it’s also important to understand how those data points were acquired, and whether those methods are compatible with any stance your company has taken on consumer privacy.  You should also be thinking about how consumers might react if the details of your ad targeting were to go public.  For instance, if you’re a health company targeting web users by condition and it happens to be a sensitive or embarrassing condition, you’re going to freak people out and possibly attract negative press attention.

Insisting on data transparency means you’ll understand how data points are collected and you’ll be able to defend your use of them, if and when the time comes.

Environmental Transparency

This is the other big one – the one that lands brands on the front page when it’s found that their ads are supporting objectionable content, or that some large percentage of their ads are being served to bots or in places where they’ll never be viewed.

Programmatic media vendors should always give you transparency with respect to where your ads are running.  Personally, my agency has taken a whitelist approach, such that ads can run only on target lists of websites that we provide to our trading desk.  Others take a blacklist approach, opting to identify undesirable sites and pre-empt them from buys.  But regardless of which approach you take, neither one works if you don’t have visibility into where you’re running.

As ad opportunities come up for bid, the ad exchanges usually present a URL that should indicate where the ad is to run.  You need a business rule within your RTB programmatic buys that ensures that if a URL isn’t presented, your programmatic partner shouldn’t bid on the impression.  Employing a brand safety vendor should take care of almost all issues where the URL presented doesn’t match where the ad eventually runs.  With this two-tiered approach, you can ensure full environmental transparency and avoid any unpleasant surprises.

So the next time you hear someone talking about transparency in programmatic, and they’re not being specific, drill further in and make sure you understand which of the above flavors of transparency they’re really talking about.  And make sure your future programmatic buys give you all three types so that you can feel confident about your media investment.

Tom Hespos is a contributor at The Makegood and Founder and Chief Media Officer at Underscore Marketing, a firm that creates and manages digital marketing programs for healthcare and healthy brands. He is a 20-year veteran of the integrated media business.