It’s been widely acknowledged that transparency is one of the biggest issues facing today’s programmatic ecosystem. Both publishers and buyers recognise the lack of visibility in the current transaction process and are seeking solutions to shine a light on the barriers and fees separating buyers and sellers.
In the traditional revenue share model, buyers have very little insight into how much of their media budget is sacrificed to third-party fees and how much actually reaches publishers.
“In the average transaction, you have myriad players, hand-offs, marketplaces and fees—all of which are completely opaque—making the value to both the brand and the publisher difficult to understand.”
– Michael Zacharski, CEO of Engine Technology and EMX Digital
As a result, many SSPs and exchange partners are talking about cost-plus purchasing. Cost-plus purchasing models are upfront about the cost of transactions, enabling buyers to efficiently budget and know how much of their ad spend will go towards final bids.
It’s clear that the programmatic industry is in search for the keys to transparency success—and for good reason. The following are 3 major benefits of a more transparent programmatic marketplace:
1. Tracking Ad Spend
In a more transparent marketplace, buyers can better track their ad spend. When buyers can better track their ad spend, they can confidently allocate their budget and know exactly how much of their spend is going towards final bids.
For buyers, this leads to more confident bidding, knowing the actual worth of inventory space, and an overall healthier understanding of exactly how programmatic is working for their clients.
2. Measurable ROI
In a less transparent marketplace, it’s nearly impossible for buyers to know how much of their ad spend is actually allocated towards final bids. As a result, it’s very challenging to measure the true return on investment of the allocated media budget.
A more transparent marketplace means tangible ROI measurements. For buyers, this means accurately reporting back to clients to show the positive effects of their programmatic investment. With tangible results, clients are more likely to make higher investments which, for publishers, often translates to higher bids.
3. Unbiased Marketplace
The point of a programmatic auction is to use digital mechanics to create a fair playing field for all parties. In a less transparent marketplace, loopholes such as bid-caching and favoured proprietary container treatment have created a biased playing field for both publishers and buyers.
With a more transparent marketplace, the actual worth of inventory space could emerge. This would help lead to an unbiased playing field—one without barriers and fees standing in the way of targeted inventory.
“Opaque transactions and fees make programmatic advertising difficult and complex. They create avoidance from buyers and commoditisation of inventory for publishers. Neither party is happy. Transparency can bring about a shift in the mindset of programmatic, helping to foster a balanced ecosystem where buyers know what they’re paying for and publishers feel their inventory is valued.”
– Cory Schnurr, EMX Director of Demand Strategy and Partnerships
Transparency is a programmatic challenge in need of a solution. At EMX, we have been working towards our Transparent Marketplace (TMP). The TMP model offers buyers full upfront visibility into the cost of each transaction, allowing them to more efficiently identify and purchase quality inventory and secure more return on investment. In addition, the TMP model removes barriers and fees normally imposed in the transactions, increasing win rates, fill rates, and offering both parties a less biased marketplace.