Rethinking Programmatic: Towards a Transparent Trading Model
www.exchangewire.com, 21.12.2016: For some time now, the rapid pace of change in the online publishing industry has led to a widening gulf between programmatic providers and publishers. With programmatic trading being a huge part of how digital publishers and content providers monetise their inventory, ad tech expert and CTO of Improve Digital, Garry Turkington, discusses what advertising technology providers can do to bridge the gap; and how one company has taken responsibility in pushing the industry towards increased transparency for publishers.
Reimagining the programmatic auction model
We all know that the days of programmatic being a novelty on the publishing scene are long gone; we’re now in a boom phase. What we’ve been witnessing over the last few years is a proliferation in ad tech providers, offers, and promises. Content providers have been voicing increasing concerns in the face of this fragmentation; and I believe it’s the responsibility of those in ad tech to take those concerns seriously and respond.
I also believe in building that need to take responsibility into everything you do as an ad tech provider. It’s what we’ve always done and what our products have always represented. But when publishers started coming to us a few years ago telling us that they’re experiencing a lack of transparency over margins, a lack of control over their business, and anxiety over loss of revenue, we knew we had reached a tipping point in the industry. And it soon became apparent to me, and others, that addressing the problem wouldn’t mean just adding or removing a few capabilities to a programmatic platform, it would mean completely re-engineering that platform from the ground up.
Part of that re-engineering process was reimagining the programmatic auction model itself, as well as adding user-focus in other areas. The result is, what I believe to be, a new approach to publisher-side technology – one that replaces the need to use multiple servers, exchanges, and platforms with a single, integrated solution. That allows all campaigns to compete in a single auction. It not only gives content providers a more transparent understanding of what processes are going on in the programmatic auction, but also ultimately how they make their revenue.
Smart technology makes for higher revenue: a holistic auction model explained
In order for the auction principle to play out, we created a holistic auction that allows direct campaigns to compete in the same space as all other campaigns, so that price levels are higher right out of the gate. Now, content providers can book and optimise all their campaigns in a single, integrated system and the algorithm takes all factors into account such as priority, demand, selling rules, and bid density. Because all of those factors change from one moment to the next, we had to push our existing smart technology to a whole new level in order for the system to consistently return the highest price per impression.In the old situation, content providers were relying on various combinations of ad server and SSP technology. The recent rise of header bidding has muddied the waters even more. But both economic theory and experience tell us that the greater the number of campaigns you have competing in a single space, meaning a single auction, the higher the revenue the impressions can generate. Splitting up campaigns among multiple systems means this principle isn’t allowed to play out.
But creating a holistic auction isn’t just about generating the highest price per individual impression. It allows us to answer content providers’ need for both more control over their business, and more transparency. In terms of control, a single, integrated system increases the depth of business insight, allowing content providers to gain new insights into high-value ad inventory and audiences. In terms of transparency, working with a single publisher-side system means that content providers know exactly where their revenue is coming from. We are and have always been open about how we make our profits. We made a conscious decision from the moment of our founding to be clear about how our business model works and whose interests we stand behind in the industry.
User-focus: programmatic that’s efficient
Creating an all-in-one solution is one way that we, as an ad tech provider, are responding to publishers’ needs for transparency and control. Another way is keeping user-focus top-of-mind when redesigning any solution. In this case, that meant creating suitable API integrations for better publisher efficiency. The API integrations we’ve added allow publishers to seamlessly connect technologies, automate and control processes, and access their data – as well as focus on yield strategy rather than reporting. Apart from that, a redesigned, intuitive UI rounds off the emphasis on user-focus.
Let’s keep the conversation going
As ad tech providers, we all have a responsibility to answer content provider concerns. Creating a holistic, transparent, programmatic solution has been a crucial response to content providers’ needs and industry dialogue. However, that doesn’t mean development stops there. The programmatic industry needs to continue listening to content providers. And, with a holistic auction model at its foundation, the new platform is both flexible and future-ready. We all know the whole advertising industry moves fast. Content providers need their programmatic technology partners to move with it.