Ad exchanges to publishers, advertisers: Here’s how we’ll make programmatic safer

Six ad exchanges this week released an open letter pledging to uphold certain principles in order to overcome the ongoing problems that plague programmatic advertising.

“Sell-side exchanges have come together to adopt a framework of principles and commitments that promote clarity and trust for every participant in the market,” the CEOs of the exchanges said in the letter. The coalition consists of the Rubicon Project, OpenX, PubMatic, Sovrn, SpotX and Telaria.

The next step is for the Trustworthy Accountability Group (TAG), a coalition formed by industry trade groups aimed at eliminating ad fraud, to review the group’s recommendations and determine how to enforce them.

“Together we are committed to unleashing the full potential of programmatic advertising. Advertisers, publishers and their representatives need and deserve transparent marketplace principles, which clearly explain how the market operates, reduce friction, ensure quality and increase value for buyers and sellers,” the CEOs said.

Last week, buy-side platform Sizmek published its own list of supply-side policies.

Three core principles. The letter outlines specific measures that will support three core principles:

• Efficiency to reduce transaction costs by eliminating waste and fraud.
• Transparency through the clear business practices necessary to maintain trust among participants in the supply chain.
• Fair market principles that establish clear and unambiguous ground rules that balance the objectives of all marketplace participants.

Among the specific measures recommended by the group are high quality assurance goals, including a requirement that 100 percent of all domains and apps be reviewed for brand safety, ad count, refresh rates and quality, and 100 percent of ad requests be scanned and filtered in real time for invalid traffic.

It also includes measures to eliminate infrastructure waste, improve fee transparency, create fully auditable supply chains and provide clear auction rules.

“Leading advertising exchanges coming together to develop a shared set of principles on transparency, efficiency, and fair-market values in programmatic is an incredibly important step forward for the entire advertising industry,” said Mike Zaneis, TAG’s president.

Transparency could help allay trust issues. Dallas Lawrence, chief communications and brand officer at OpenX, said, the rules and standards laid out in the letter are aimed at solving some of the industry’s big problems collectively in order “to maximize participation in programmatic advertising for all.”

Walter Knapp, CEO at Sovrn said, “The bottom line for brands is these principles make programmatic a better, more responsible, and more trusted place for their ad spend.”

Why you should care. Though programmatic advertising can offer great benefits in terms of operational ease and giving marketers more control, it’s been beleaguered by numerous problems including fraud, concerns about transparency, pricing,  measurement and brand safety controls that have made advertisers and publishers skittish.

In fact, solving programmatic’s issues has become its own growth industry with many companies and organizations saying they’ve got a solution.  Now the exchanges are turning to more stringent self-regulatory boundaries.

“Major competitors have signed on the dotted line saying the industry needs to stop optimizing against one another, often at the expense of publishers and advertisers, and focus on investing in a more transparent, efficient and fair market for buyers and sellers,” OpenX’s Lawrence said.

“For brands and agencies and DSPs, these principles can easily be adopted into new contracting language that will wipe out 95 percent of the fraud, waste and abuse occurring in some parts of the supply chain today,” said Lawrence. “TAG certification will be an even further step when it comes online enabling all buyers to easily verify whether a partner has made the real commitments necessary to earn their brand advertising dollars.”