Removing the Barriers to Growing Online Media Spend: Transparency

Over 75% of Americans regularly spend time online. All savvy marketers realize that digital is the fastest growing component of their marketing strategy.

However online media spend has grown at a much slower rate than consumer growth in time spent online, why is this?

There are two clear reasons for the lag in movement of advertising dollars online; one, transparency (or the lack of it) and two, standardization of high impact formats such as video, rich media and full page ads.  In this piece, we will focus on transparency. In a follow up article, we will discuss standardization.

Think Equity has stated that approximately 90% of online advertising is sold through “non-premium” channels which automates the monetization of “remnant” display advertising – which includes ad networks and ad exchanges. Many of these remnant impressions have limited transparency. Typically publishers have pushed back on providing transparency to advertisers as it has caused channel conflict with their internal sales team. In addition, the publishers have fears around rate card erosion due to the auction pricing within exchanges that pushes prices to market clearing levels.

Separately, audiences buying at the impression/cookie/user level, through demand-side platforms and real-time bidding have made display advertising more efficient and effective than ever before. Agencies and brand marketers are embracing impression level buying. As a result, transparency has become more important than ever before. Also, as more Fortune 1,000 brands move an increasing share of their budgets online, they will demand full transparency and the accompanying efficiency gains.

As premium publishers see an increasing amount of ad dollars shift to the real-time exchange environment and experience first hand the likelihood of poor monetization of their remnant inventory without transparency, publishers are coming to realize that if they don’t offer transparency and work with ad exchanges they stand to loose out on significant advertising dollars.

Real Time Bidding has provided a win-win situation for both marketers and publishers. Real Time Bidding allows publishers to exercise greater control over their exchange inventory. Many exchanges offer controls allowing publishers to dynamically block advertisers on an impression level basis, reducing channel conflict with their internal sales teams.

Real Time Bidding technology not only lowers the bar for delivering on transparency (due to less parties involved in the value chain), it also introduces an additional level of brand safety. Using real time impression level analysis, DSP’s can categorize sites based on the content of the page and allow advertisers to build black and white lists/rules using data from contextual providers such as Proximic.

There is a clear opportunity for the digital display pie to grow even more rapidly, but for that to happen all constituents (advertisers, agencies, ad networks, DSP’s, exchanges and publishers) need to work together to remove the barriers to growth, namely transparency.