Can advertisers really expect true transparency in mobile?

By Tim Koschella | CEO

July 22, 2015 | 5 min read

Mobile advertising has become increasingly transparent as more companies have answered advertisers' call for access to traffic and tracking data. Full transparency ensures maximum ROI and a higher lifetime value, earning the trust of advertisers whose dollars are much needed in the mobile ads arena. The argument for greater insight is clear, but can app advertisers really expect true transparency in mobile?

It’s not that we have no transparency at all; rather, it may mean very different things to different stakeholders. Full and complete transparency, by definition, would mean knowing every detail of each ad impression, while a complete lack of transparency means we know nothing at all. In reality, most advertisers and publishers coexist (uncomfortably) in the gray area between.

While the RTB movement is promising and certainly favors a more transparent ad marketplace, adoption has been sluggish. Programmatic accounted for 45 per cent of digital display spend in the U.S. in 2014, but it has been much slower to catch on in APAC, Europe, Latin America, and elsewhere. This resistance to a more open way of doing digital media buys is the natural byproduct of three key barriers to increased transparency:

Technical barriers. Many ad platforms launched in the past weren’t built with transparency in mind. This wasn’t out of ill intent, but because transparency simply hasn’t been taken into account from all perspectives. It becomes a question then of what level of transparency is needed, and does your system support it?

Full transparency at all times would cause an unmanageable flood of data. In the end, someone needs to use that data to make business decisions, in order to prove that level of transparency is worth it.

Open RTB is increasingly becoming the standard across the ecosystem and it’s a trend I hope to see continue as the infrastructure is very much built to support a high level of transparency.

Business incentives. Different players in the ad ecosystem have different business incentives for and against true transparency. Agencies, for example, are buying inventory on behalf of their clients, who in turn want to get the best deal for their ad spend. The agency is driven to maximize profits, so there’s an incentive for them to accept kickbacks.

Consider, as well, a situation where 50 per cent of the advertiser clicks are coming from one publisher. The ad network has put a great deal of work into establishing the network and it would be unfair to cut them out as middleman. However, that’s exactly what would happen if full transparency meant that the advertiser knew exactly where that revenue came from; they would just work with the publisher directly.

User privacy. Consumers aren’t being asked by the DSP (or anyone else) whether they’re allowed to take their data or not. Industry associations and lobbyists will need to take the lead in educating consumers about transparency and its effect on privacy.

Consumers seem more comfortable than ever before exchanging some information for a more personalized experience online, and particularly on mobile. What we’re seeing, though, is more the facade of transparency; hollow assurances that user privacy is protected when it’s actually not.

Facebook and Google, for example, do provide some transparency, but only to a point. A lot of user data is made available for targeting and reporting, but they are wise in choosing what to reveal and what to keep for their own purposes. Users, while they believe their privacy is protected, don’t understand the extent to which their personas (complete with identifiable information) are still very much being recreated inside the ad serving system.

So can advertisers really expect true transparency in mobile?

Not today, but we’re heading that way. Complete transparency will take quite a while to achieve and will move only at the speed at which our technology issues are resolved and business barriers reduced. However, as we continually shift to more transparent options, the pressure on the less transparent players will increase. It will take time, but this is how the shift will happen — and it’s already underway.

Tim Koschella is the CEO of AppLift


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