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Overcoming RTB’s Transparency Issues

Written on
Jun 12, 2014 
Author
Fred Hsu  |

ADOTAS – As real-time bidding takes off, transparency is becoming a predominant issue among advertisers, and media sellers and buyers. The buying and selling happens instantaneously in – you guessed it – real-time, and because it is still relatively new, the rules of the road are still being defined. As a result, some players in the industry are still timid about the technology. There are several different complexities of this Achilles Heel for RTB.  I oftentimes hear of many “black box” approaches and as a result, advertiser skittishness and a tendency to lean on bell-weathers such as Facebook advertising. Fortunately, there are also solutions to these challenges that the industry should begin adopting. I’ve outlined the challenges and some potential solutions below.

Rapid Global Expansion

We are currently experiencing an explosion of new mobile ad exchanges, coming out of everywhere from India to China to South America. The traditional mobile ad network concept from 2009-2011 is now fundamentally being redefined as an ad exchange. This creates the need to properly vet exchanges on behalf of the end advertiser from not just a transparency perspective, but also a technical and security one. Questions we should be asking include: Is this a new exchange representing mostly chat or utility apps? What kind of ad inventory am I getting myself and my advertiser into? How does the exchange properly tag or verify each piece of mobile web or app ad inventory?

Securing Data

It is essential to understand that difference between a technical policy and a technical infrastructure. Perhaps more importantly, it is essential that they are both sound. Regardless of how tight your policy language is, no contract will ever truly ensure the storage requirements, proper encryption and data retention policy unless those systems are subject to audit rights by 3rd party certification entities, even by advertiser technical teams themselves. This very concept scares the life out of most DSPs. In fact, those audit rights may be from advertiser to DSP, DSP to exchange, exchange to publisher.

The advertiser customer should ultimately be able to obtain full transparency down to the device identifier, site or app his or her advertisement was being placed on, and how that ad transaction was securely being delivered. For in-app advertising, various fingerprinting methods for anonymous identifying of end-users reduce the level of transparency and accountability in the ecosystem, especially now that both Google and Apple support privacy-compliant identifiers specifically for advertising.

Trading Desks, DSPs and Middle-Men

An increasingly opaque network of trading desks, DSPs and middle-men is increasing the amount of complaints from top-end mobile advertisers. For example, Advertiser 1 finds out that she is allocating money to 2-3 DSPs and trading desks, each purchasing on the same exchange and effectively driving up her unit-cost as she effectively bids against herself.

In another example, Advertiser 2 finds out from his customer service department that an advertisement for his app was being displayed on a lewd, spammy, or otherwise previously blacklisted piece of inventory.

Audits will give advertisers a better idea of what these players are doing with their ad dollars.

1st, 2nd, and 3rd Party Data

Many mobile advertisers are deflecting to Facebook for their 2nd party data – in other words, data directly from the traffic source that pretty much acts like a black box. Data goes in, either directly from users augmenting their own profile, or implicitly, such as a collection of behavior profiles. No data ever comes out. It’s the lock-box concept and the crown jewel of companies like Facebook and LinkedIn.

1st party data is data supplied directly from advertisers, with specifics on their customers. Advertisers may want to share this data, once they have built enough trust, with networks to re-market or infer lookalikes. 3rd party data is data supplied by various data companies from sources such as Axciom, Transunion, BlueKai and many others. These companies have built large businesses based on proprietary data collection and sharing methods.

Sometimes you have people within the same household sharing devices. For example – one may be using Facebook and reading business news 20 percent of the time, the other playing, even spending within dress-up doll games the other 80 percent of the time. Even if the device is being used by the same person, he can be identified by Facebook and another ad network differently. After reading Mary Meeker’s 2014 report on the state of the mobile industry, it’s clear to me that data – 1st, 2nd and 3rd party– is going to pave the way for the future of mobile, helping bridge the huge gap between advertising spend and time people spent on mobile devices. The better the data, the more advertisers will spend.

Accountability for every ad impression

All these problems can be solved with full transparency and being accountable to your advertiser from a full audit perspective down to each delivered ad impression, click and device ID. If there isn’t that capability, the advertiser must ask himself whether he may be throwing money into a black hole.





Fred Hsu is CEO at RTB.com, a division of Manage.com Group Inc. and largest mobile RTB buyer across all the major mobile ad exchanges. Fred leads the overall vision, product, strategy and operations for the company.

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