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27 July 2013 - 10:14am | posted by | 0 comments

The growth of transparency in programmatic trading

The growth of transparency in programmatic trading The growth of transparency in programmatic trading

As reported by The Drum earlier this week, Kellogg’s has increased investment in programmatic trading and in turn greater demands for “more transparency” made for interesting reading. The article highlights how a major brand has utilised the efficiencies of this emerging trading protocol to drive both price and audience reach efficiency. It’s encouraging to see a big FMCG company directly engaging with new advertising technology in this manner and further reinforces the role that programmatic buying and all the innovation that spins off the back of this evolution will play in the future.

From our own experience here at Affectv, both points raised by Matt Pritchard from Kellogg’s on transparency of pricing and usage of data are echoed in varying degrees of loudness and clarity by clients either actively participating in programmatic buying themselves or moving some of their media spend to this area through agencies and their media partners. I can only comment from our own experience as a provider of services to agencies and clients but there will certainly continue to be many further discussions on these topics from all parties in the buy and sell chain in the future.

The discussion on transparency of price should factor in both price and performance and the role that various players play in the buy/sell chain. A business like Affectv sits more on the “ad-network” side of the spectrum. We bundle inventory, data and real-time decision-making together into a unit cost and that is what we charge clients and agencies. That cost factors in, amongst others, our recruitment costs (back-end and front-end developers, data analysts, operational and sales teams), data costs (data bought, data aggregated from our own tools, data storage, processing and syncing), proprietary technology that we have spent over two years building and buying costs (to access those audiences in real time). We have to prove our value through delivering results above and beyond our competitors and agency or clients own efforts, but beyond this we have the added challenge, in this current landscape, of proving that our technology is not a “black box” while balancing our need to protect our own intellectual property. Whether this is walking clients through our data collection, sorting and aggregation and use strategies and methodologies, through to using third party technology like Comscore to verify our audiences and our own insight reporting; we need to go beyond results to prove our worth in the buy/sell chain. I imagine other providers in the chain including the agencies will have the same challenges of managing client’s needs for price transparency alongside the need to protect their IP and proving their value.

As to the point on data transparency and reassurance on use of first party data, this issue will require players from across the buy/sell programmatic spectrum to get involved. Brands should be reassured that their advertising partners comply with current regulations, comply with best practice on 1st/3rd party data usage and user permission. Some of the reassurance can be driven by regulation, just as IASH provided a standard of best practice on ad placement and audit process in the early days of ad networks, so should we have industry led regulation on data use. While initiatives such as OBA, NAI and IAB Online Choices provide consumer led best practice, there is limited focus on the b2b best practice on data collection and usage and currently there is little in the way of initiatives to consider audits on data use by the various stakeholders in the programmatic space. Also unlike previous initiatives to regulate and audit the online ad space, such as IASH, there should be consideration for wider reaching scope, beyond “ad networks”, to include all buyers and sellers in the programmatic space including brands, agencies and publishers.

Another consideration is for wider proliferation of technological solutions that allow various players in the space to essentially audit cookie collection at specific points to understand who is “participating” in data collection. This could provide a good jump-off point for campaign and brand-specific auditing and data collection compliance. Challenges here may be around wide acceptance on a preferred “auditing” methodology and technology and education on the use of these solutions to ensure compliance without it turning into a panicked witch hunt.

Returning back to the main story of Kellogg’s use of programmatic and the challenges Matt Pritchard raises are all healthy signs of a sector of the advertising space growing up. Increased and widened investment is obviously a great endorsement of the use of this programmatic protocol but more importantly the highlighting of transparency and accountability and how we, as an ecosystem, then respond to those questions, will set the tone for what could and should be a pivotal part of the advertising sector.

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