MediaMath

MediaMath delivers the most responsive, accountable and performant advertising technology for brands to buy addressable media.

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The Radical Need for Programmatic Redesign

June 29, 2021

The advertising ecosystem is begging for a redesign and it’s our job to give it one.

While that may be a rather jarring statement, it certainly isn’t a false one. It only takes a few data points see how deep the problems reach. According to recent research from MediaMath and Forrester, 94% of marketers face executive scrutiny on the performance of their ad spend. This suspicion coming from the C-Suite is only exacerbated by studies like the one from ISBA claiming that for every ad dollar that reaches the publisher, 15% cannot be accounted for due to an “unknown delta.” When one parses through these, it’s hardly surprising that 20% of brands are leveraging in-house programmatic strategies and 50%+ have partially moved programmatic buying in-house, as stated in the IAB’s 2020 U.S Report on Programmatic In-Housing.

But what can we learn from this shift? What are the underlying causes driving this change? The numbers we see, as stark and glaring as they may be, are simply the symptoms of a deeper underlying issue. If we are being honest with ourselves, we will have to accept that the ecosystem we created, and operate today, is seriously flawed. There are many intermediaries between the buyer and the seller, and the entire supply chain has become too complex and – more importantly – too opaque. Combine this with the groundswell around privacy of user data, the various regulations being enforced to address it, and the technological changes coming about as a result of this new reality, and it becomes obvious that our ecosystem needs to be redesigned. But where do we start? As we see it, there are three things that need to happen: Transparency across the supply chain, supply path management, and our current methods of measurement and attribution all need to be re-conceptualized, and, yes, redesigned.

Redesigning Transparency

We need our ecosystem to be addressable, accountable, and aligned. Addressable in the sense that the brands and agencies need to be comfortable in the knowledge that there is indeed a real human, and a human who matters to the advertiser, at the receiving end of the advertising message being delivered. Accountable as in there is clear understanding of the various fees, costs and overhead costs that are applied across the various transaction points of the supply chain. Aligned so that there is a bi-directional flow of information between the buyer and the seller giving both insight and clarity into the value exchange between them.

The signals required to generate this level of transparency currently exist but are not necessarily exposed or acted upon by all the participants in the supply chain. We need to create a framework in which transparency is enforced, mandated, and normalized by exposure.

Redesigning Supply Path Management

The current complexities of the supply chain -- and the resultant fragmented ad spend we experience -- make it impossible for brands and agencies to purchase media in the most efficient manner. The presence of various intermediaries along with the publisher’s rightful attempt to maximize their monetization opportunity results in the same piece of inventory being available through various paths. Any entity working on behalf of the buyer must provide means through which the most efficient path to supply is made available.

Also, with the privacy enforcement changes coming about within the ecosystem, we will see further fragmentation of identity and thus a change in the way people-based marketing is carried out. As publishers find themselves becoming the gatekeepers of identity, there is an increased likelihood of numerous silos of data-overlayed-inventory being presented within the ecosystem. A modernized supply path management solution -- which allows for the identification of the most efficient path to a targeted inventory -- is needed now more than ever.

Redesigning Measurement & Attribution

Even if we sat back and did nothing, measure and attribution would still be looking down the barrel of a major disruption due to the changes coming about because of privacy regulations. With 3rd party cookies going away beginning in 2022, marketers will lose the ability to run attribution models in their usual manner. Other than the last-click attribution model which will continue to work using a 1st party cookie, other attribution models will break because the advertiser will no longer be able to track a user across the Internet. The walled gardens will continue to have the advantage of being able to track logged-in users and run attribution within their closed systems, but the full view of the user will be lost for the marketer.

In the absence of the 3rd party cookie, using authenticated logged-in users to create persistent identifiers will gain prominence. Publishers will start to build more login-walls so as to be able to create 1st party data based audience sets. Ecosystem alliances will be formed with identity providers, marketers, and attribution vendors. DSPs and SSPs will find themselves working with publishers to leverage technologies such as clean rooms and privacy-centric data lakes in order to share identity across various systems and run attribution models using them.

The good news is that even though the volume of authenticated identity will be smaller than what we get using the current cookie technology, the quality of the authenticated identity will be much higher than what the 3rd party cookie provides. By using artificial intelligence, machine learning, and advanced data science techniques, we will be able to run the models with comparable efficacy using smaller datasets.

This all feels like a daunting endeavor… and it is. But it’s unavoidable and (thankfully) entirely possible. So as we gather to assess the current landscape of programmatic, I think we can all agree that the choice is obvious: retire the ecosystem and call it a day, or redesign the ecosystem and buckle up for an exciting and limitless future!

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advertising