As you may have noticed, the zillions of pages on the internet that have stuff on them for you to look at, often referred to as “publishers”, contain a plethora of adverts. How they get there is the result of an extraordinary technological feat which auctions advertising inventory to advertisers, selected and served to an individual consumer in under ½ a second. But there is not much transparency when it comes to computerized sequential auctioning. Said another way, inside this black box of programmatic advertising, information asymmetry favors the tech that enables the system.
Allow me to explain…
Imagine a real life auction where a bunch of people sit in an audience and bid on, let’s say a Rorschach painting. Now Imagine that two curtains separate the Audience and the Seller of the painting, and furthermore, that in between those 2 curtains are the representative parties of the Audience and the Seller. Nobody is able to see or hear what goes on in that space. What can possibly go wrong?!
Well, that is the case with the Online auction, whereas you have an SSP (Supply Side Platform) representing the Publishers ad space and a DSP (Demand Side Platform) representing the Advertisers who wish to buy it. To put it lightly, this set up makes it difficult if not impossible for participants to know if auction rules are being adhered to or not:
- No visibility into the supply chain means that an advertiser does not know how much of their $1 went toward showing an ad and how much went toward fees. Therefore, they cannot reasonably audit the ad sale.
- Publishers wish to know if their SSP is simply passing the sale through OR if they asked the DSP for a higher rate than what they were selling it for, and keeping the difference.
- Advertises don’t know if their DSP is renting instead of buying inventory for them; purchasing inventory at one price and reselling it at a higher one.
- Lack of auction level data means that Publishers only know who purchased their inventory but not who bid on it (who was interested), which could otherwise be valuable information.
- Advertisers wish to know what the SSP’s are charging their publishers so they can select the cheapest path to secure specific inventory…… and at the same time put competitive pressure on the more expensive SSP.
Then, after they’ve come out from behind the curtain with all the clever lies and evasive storytelling, 2 BIG questions still remain:
Did anyone even see the ad? Tell me something, when’s the last time you did anything but relegate an online banner ad to your peripheral vision?
Did the ad have anything to do with the sale? Tell me something else .. wherever you are, look around and point to the item you purchased as a result of an online ad.
