The transparency issue has been a hot topic in digital advertising since 2016. In 2017, the topic gained more traction as the digital marketing sphere in the West began to address the transparency issue seriously. Meanwhile, what is the level of transparency in China’s advertising industry and what exactly are the pain points? Is there anything that the tech vendors should do? With these topics in mind, the ad tech editorial team speaks to DeepZero | iPinYou CEO Grace Huang.
“The past year has been a sensitive period in terms of building a ‘trust relationship’ with brand marketers across the digital advertising industry in China. It is also a time when the traditional media strikes back. TV, print media, and OOH have come out in full force to emphasize that they are more ‘transparent’ than digital media. There is no doubt that the transparency issue has been the focus point for the digital marketing industry, and it is a guiding principle for DeepZero | iPinYou as an ad tech platform,” Grace Huang said.
Whether the traditional media would be able to make a comeback or not was dependent on market validation. But Grace Huang believed that 2017 will be the year when the value of programmatic advertising gets a reboot as the market matures and the ‘black box’ will be unveiled under the demand of marketers from big brands.
Complicated and disarrayed ad tech ecosystem
The very basis of programmatic advertising is about improving the efficiency and control process of digital ad serving through technical and procedural methods.
However, the digital advertising market has become mixed up in recent years due to the presence of certain rogue players. Several ad tech companies operate under the premise of ‘programmatic buying’ even though what they offer is far from the standards.
On the other hand, many ad tech companies run into conflicts of interest by wearing many hats as publishers, agencies, or even a data firm. The possibilities seem to be endless. “It is just like financial planners should not get into stock buying, a technical company should just remain as one and not anything else,” said Grace Huang.
Two challenges in implementing transparency
Grace Huang believed that two obstacles hinder transparency in programmatic advertising:
1: Lack of consensus from brand marketers
What are the principles behind programmatic ad serving? What are the roles of ad tech vendors? How does one platform measure up against the other? Brand marketers have not had a good grasp of the issues concerned for a long time, leading to an incomprehensive strategy planning in programmatic buying.
The problem is compounded by the complexity of technical issues, leading to a huge disparity between the various platforms as well as information asymmetry in the market. This inevitably confuses the brand marketers, the very people deciding the allocations in ad spend.
Citing an example, Grace Huang said DeepZero | iPinYou operates under the belief that digital advertising should be 100% programmatic. However, many brand marketers thought otherwise as they believed that programmatic advertising should only be executed whenever necessary. “If programmatic only accounts for 1% of the budget, then when can we begin to talk about transparency?” she said.
2: Performance guaranteed inertial model
Over the years, guaranteed performance is often taken as a given in digital media buying whether in direct buying or DSP programmatic buying by brand marketers, media agencies, or ad tech vendors. There will be results after ad serving as long as the ad tech vendors give their word. However, the fact of the matter is the whole process of ad serving is usually cloaked in darkness.
Under this model, brand marketers are likely to be passive buyers who just have to accept the results at hand. They would not know how to improve the ad-serving process; when the results are not up to their expectations, the marketers feel that it is reasonable to lower the fees of the ad vendors. Therefore, it seems that the ad vendors have indeed overpromised and many have resorted to fraudulent tactics to reach the targets set by their clients.
The analogy can be seen in stock markets where the big players hand over their funds to the investment companies and only pay attention to the final profitability report rather than scrutinizing over the details. There is no denying that such an attitude carries some risk. So, it becomes more apparent that brand marketers should not only demand results but more control and understanding over the process.
Where is the motivation for transparency?
Following the example from the ad industry in the West, the call for transparency in the China ad market should be driven by the big brands.
Grace Huang expressed her belief that the transparency issue is equally demanding on the brand marketers. They need to spend more time and energy to be more involved in strategy planning and implementation. What they should do is take a lot of their internal resources and plans to set achievable goals and strategies. From the implementation point of view, brands and media agencies must know the comparison between the different tech platforms, how best to tap into these different systems, and understand the value the technical suites can bring to their campaigns.
Meanwhile, the final data report may show that transparency needs a higher cost and may even result in lower traffic. However, brand marketers must keep in mind that transparency is not simply to lower costs or to achieve better KPIs. Rather, the very intention of transparency is to give brands more control and real results. It is when brand marketers have a good grasp of brand safety and real results that they will start to have a more concrete demand for transparency. This is also a sign that the market has matured.
Grace Huang revealed that the international brands that she has worked with displayed a higher level of maturity and a stronger push for transparency besides being able to look at the performance of each platform objectively. However, brands across the industry have varied understandings of the transparency issue and do not what measures to take and what results to expect. Many of the clients are already on the path toward transparency, but the effort lacks a consensus for the effect to reverberate across the market.
Value proposition for ad vendors under the wave of transparency
Speaking on the brand safety scandal that hit Google recently, Grace Huang opined that the issue came up due to the blind trust that brands place in publishers. Under the media selling and buying relationship, publishers may run into viewability and brand safety issues in their attempt to protect their profits. As all the different parties are each set out for their interests, there must be a tech vendor that acts out on the interest of the brand during the media buying process.
Grace Huang maintained that the value proposition of DeepZero | iPinYou is that it is centered on the interest of the brand and its platform is open to marketers. The company has spent tens of millions since October 2015 to upgrade its platform under its transparency drive.
“From the surface, each company would have its own platform and system. But if you scrutinize further, the quality can be disparaging. The biggest difference between iPinYou’s system and the others fall into two factors. First, different design initiation—whether to be transparency or not, these are completely different undertakings. iPinYou has an open approach towards the brand marketers, they are given a direct hand to operate the system. Under the new system, the fee charges, traffic sources, audience data, backend technology, third-party data sources, third-party traffic and third-party monitoring and verification are completely transparent to the brands.”
Second, different capabilities are offered by the technical system. Since 2013, DeepZero | iPinYou’s technical offerings not only include RTB serving but also guaranteed buy and preferred deals. “If we don’t have the technical capabilities, the overlaying factors and combination of these buying models may sound too good to be true. For our new system in particular, DeepZero | iPinYou is going all out to fight fraud and we have made signification investments into developing the bidding system. Whether it is the professionalism displayed by our team, or the traffic quality and our expertise in fighting fraud, DeepZero | iPinYou is a reliable name in this field.”
Meanwhile, Grace Huang was glad that the upgrading of DeepZero | iPinYou’s technical suite was aligned with the huge growth of interest in transparency following the reckoning in the European and US ad markets. The next step for DeepZero | iPinYou is to leverage the open system of DeepZero | iPinYou to raise awareness among brand marketers. It is important to get all the parties in the ecosystem involved, from brands, media agencies, publishers, and third-party monitoring and verification vendors, to break the existing model and make a bigger push for transparency.
