DorisRon
Member
"Transparency" in the digital advertising industry is often touted as a mean of differentiation, designed to attract companies that play in a competitive field. This concept was included in the ad-tech lexicon to appease all advertisers' fears about RTB and programmatic, but what does "transparency" mean in reality? Let us try to unravel this tangle of definitions.
Transparency for advertisers is something completely different when compared to the definition of this concept, given by sellers in their commercial offers. Therefore, until the parties have reached a consensus on this matter, there is still a certain tension between supply and demand, as well as their interpretations of the concept we discuss here. And this tension will remain until the time when we find out what is most important to each of the parties involved. Let us see in what ways the concept of "transparency" is used today, and what should be changed.
TRANSPARENCY TODAY
Perhaps the most common use of the concept of "transparency" in terms of the supplier refers to the ability to identify those sites where ads of the advertiser are displayed.
However, this definition is somewhat meaningless, because algorithmic buying was originally conceived so that the type of transparency described above can be provided automatically. In other words, this transparency is a foregone conclusion and inevitable.
SHIFT TOWARDS TRANSPARENT PRICING
Contrary to popular belief, trading desks and DSP departed from the method of "black box", which used to be popularized by ad networks. "Black box" model requires known output and input parameters at an unknown internal structure of the system. Simply put, it is a method that does not use knowledge of the internal structure of the tested object. However, it was extremely difficult for trading desks and DSP to adopt a comprehensive transparency of pricing, because it significantly reduces the cost of online advertising. One reason for this situation lies in the fact that RTB appeared between the demand and supply sides, that's why DSP can not find out the wholesale cost of advertising before the auction is complete. Sellers also want to make a profit to cover their overhead and operating costs, and many are not ready to articulate the nuances of margins.
Full pricing transparency requires all fees associated with the purchase price of media advertising, to be transparent. Extra charge for advertising, as a rule, includes maintenance costs, staff wages, profits of SSP and DSP and the use of technological innovations. Today we can observe a shift just to the side of this type of reporting, which is required by the advertiser interested in pricing transparency.
REQUIREMENTS OF TRADING DESKS
Trading desks are in the unique position of being able to use multiple sources of inventory through a variety of DSP. RTB technology, in contrast to the direct buying model, unleashed efficiency by allowing customers to determine the value of a particular impression, before offering its price at the auction. Trading desks need full transparency of data before the start of trading, including the URL and IP-address, from which the bid was made. Increased transparency through the exchange of data between the platforms would make the market much more efficient for both sellers and buyers.
TRANSPARENCY IS A BRIDGE TO THE FUTURE
In such a competitive industry, as media advertising, sellers are very beneficial calling each other to hide the nuances of media buying process. But all that is associated with buying through algorithmic technology, helps advertisers get expert knowledge and invest in the future technological possibilities. Programmatic is also beneficial for sellers who can guarantee their customers great investment returns.
While the number of companies working in the field of online advertising, is growing rapidly, we are witnessing the formation of a harmonious ecosystem, precisely imitating the stock market - economy sets its own rules, in which the price is formed under conditions of full and unconditional transparency.
Transparency for advertisers is something completely different when compared to the definition of this concept, given by sellers in their commercial offers. Therefore, until the parties have reached a consensus on this matter, there is still a certain tension between supply and demand, as well as their interpretations of the concept we discuss here. And this tension will remain until the time when we find out what is most important to each of the parties involved. Let us see in what ways the concept of "transparency" is used today, and what should be changed.
TRANSPARENCY TODAY
Perhaps the most common use of the concept of "transparency" in terms of the supplier refers to the ability to identify those sites where ads of the advertiser are displayed.
However, this definition is somewhat meaningless, because algorithmic buying was originally conceived so that the type of transparency described above can be provided automatically. In other words, this transparency is a foregone conclusion and inevitable.
SHIFT TOWARDS TRANSPARENT PRICING
Contrary to popular belief, trading desks and DSP departed from the method of "black box", which used to be popularized by ad networks. "Black box" model requires known output and input parameters at an unknown internal structure of the system. Simply put, it is a method that does not use knowledge of the internal structure of the tested object. However, it was extremely difficult for trading desks and DSP to adopt a comprehensive transparency of pricing, because it significantly reduces the cost of online advertising. One reason for this situation lies in the fact that RTB appeared between the demand and supply sides, that's why DSP can not find out the wholesale cost of advertising before the auction is complete. Sellers also want to make a profit to cover their overhead and operating costs, and many are not ready to articulate the nuances of margins.
Full pricing transparency requires all fees associated with the purchase price of media advertising, to be transparent. Extra charge for advertising, as a rule, includes maintenance costs, staff wages, profits of SSP and DSP and the use of technological innovations. Today we can observe a shift just to the side of this type of reporting, which is required by the advertiser interested in pricing transparency.
REQUIREMENTS OF TRADING DESKS
Trading desks are in the unique position of being able to use multiple sources of inventory through a variety of DSP. RTB technology, in contrast to the direct buying model, unleashed efficiency by allowing customers to determine the value of a particular impression, before offering its price at the auction. Trading desks need full transparency of data before the start of trading, including the URL and IP-address, from which the bid was made. Increased transparency through the exchange of data between the platforms would make the market much more efficient for both sellers and buyers.
TRANSPARENCY IS A BRIDGE TO THE FUTURE
In such a competitive industry, as media advertising, sellers are very beneficial calling each other to hide the nuances of media buying process. But all that is associated with buying through algorithmic technology, helps advertisers get expert knowledge and invest in the future technological possibilities. Programmatic is also beneficial for sellers who can guarantee their customers great investment returns.
While the number of companies working in the field of online advertising, is growing rapidly, we are witnessing the formation of a harmonious ecosystem, precisely imitating the stock market - economy sets its own rules, in which the price is formed under conditions of full and unconditional transparency.