‘Contracts are just the first step:’ Advertisers grapple with DSP demands

As pressure mounts on advertisers to know exactly what ads they’re paying for, the way they work with the ad tech making those purchases is changing.

GlaxoSmithKline, BT and Deutsche Telekom are among a handful of advertisers rethinking how they use demand-side platforms. Before they would’ve accepted the ad tech recommended by their agency without question or gone for the one that offered certain access to inventory. Now, advertisers are paying closer attention to how the technologies improve inventory quality and weed out the bad games happening within auctions. Those concerns have pushed those advertisers to pick the DSP partners that can help them differentiate, be that through direct publisher relationships or unique technology.

“We hired someone from the supply side to manage the relationship we own with our DSP,” said one senior marketer who wasn’t authorized to speak to Digiday. “We’re still far away from a complete view into the supply-side, but we’re using the DSP to change that. Having the expertise and ownership of the contract to do that has made us think about how we remunerate the technology. The commission-based payment model is driving our investments toward cheaper media.”

Those commission-based models penalized premium inventory and scaling spend because they were designed for the agency model, which doesn’t chime with advertisers that want to incentivize DSPs to share data. It’s not because every DSP is playing dirty tricks that they can’t all share that data, rather the way they make money is incompatible with sharing it. Marketers don’t pay Criteo on a per-impression basis, for example, and so the advertiser has no contractual right to know the cost of the media. But as the larger DSPs shift their revenue models to one that earns a transparent take rate or potentially a subscription fee like Beeswax’s SaaS model, then it’s easier for those vendors to share data on aspects like the exchanges handling their bids, the domains their ads appear on and the ad types that advertisers want.

“It’s imperative that advertisers demand and maintain ownership of their data and leverage it as a competitive advantage in their advertising,” said Ari Paparo, CEO of Beeswax. “Demand-side platforms should provide granular, log-level access to the full bid stream to ensure advertisers are capable of extracting powerful analytics and insights from their campaigns and optimize according to scenarios that are actually happening within their programmatic auctions.”

Getting that unfettered transparency and access to data is tricky. While both the demand-side platforms and the ad tech they buy from are opening themselves up to increased scrutiny, it’s not as open as some advertisers would like. Appnexus, for example, will now show buyers how much of their money goes to tech fees when they buy ads through its supply-side platform. And yet, the move is indicative of the “sleight of hand” one senior marketer said frustrates his company’s efforts to optimize their programmatic campaigns. Tech tax fees are nice to know, but it’s more important to know which exchanges operate a fair and transparent auction, which can then be used to bid into the most efficient supply paths, said the marketer on condition of anonymity.

“We’re still figuring out how we get the most out of our DSP but the more we discover about how programmatic trading works, the less confident I am that any of the players are really keen to sort out this mess,” said a senior marketer on condition of anonymity. “All the ad tech vendors do is point at each other.”

Ad tech firm Reset Digital thinks it has a workaround to the issue. The startup has released a closed beta version of a biddable transparent supply chain in partnership with a group of around 700 publishers that will cut out intermediaries and give advertisers full access to the log files containing all the metadata on what happens to their buy from the moment the bid for inventory is placed to the moment the ad is served to it.

It’s here that agencies can still play a role for advertisers, said Brian Fitzpatrick, gm for ad tech developer Iponweb’s business in EMEA. Agencies are still the “gatekeepers” to ad tech for many advertisers, and some are starting to ensure that DSPs are being open and transparent in how the media they buy is delivering value to the clients they represent, he said.


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