SSPs double down on tech fee transparency for 2019

AppNexus, Rubicon Project and Index Exchange are distancing themselves from the opaque way programmatic budgets are traded to bolster their stances as vendors that can help buyers demystify those auctions. It’s a far cry from the pitches from some supply-side platforms 12 months ago, which appeared to have been outpaced by demand-side platforms when it came to tackling the problems of programmatic, as evidenced by the furor around bid caching. It left some observers questioning the value SSPs bring to an already crowded, commoditized marketplace, which is something the larger vendors will try to answer in 2019.

AppNexus said in late 2018 it will let ad buyers see how much of their money is spent on tech fees when they buy publisher inventory using its tech. It isn’t the clearest view into ad tech fees, however. In the U.S., buyers will see fees for 82 percent of transactions whereas globally they will only be able to see 58 percent of fees disclosed.

While this isn’t a full reveal of what happens to ad budgets, it could give advertisers enough to carve out the shortest and cheapest route to publisher inventory. If an advertiser can only connect with SSPs that don’t operate hidden fees then it increases their chances of winning the right bids at reasonable prices, for example.

Offering that level of insight isn’t a simple process. It took AppNexus a year to renegotiate contracts with enough sellers for it to offer something big enough that buyers would go for.

But there’s more to offer than transparency into tech fees. Advertisers are leaning into opportunities where they can learn more about programmatic buying, particularly the dynamics between publishers and exchanges, said Ryan Christensen, svp of product at AppNexus’ owner Xandr. It’s led to productive conversations with marketers directly, said Christensen, who explained how those discussions tend to focus on topics like auction dynamics and publisher-exchange integrations.

“Transparency of technology fees is an important step toward helping advertisers evaluate partners and maximize the use of their working media dollar,” he said. “As is the case with our technology fee transparency agreements with publishers, we’ve been pushing for marketers’ visibility into the supply path to be the default for the industry.”

It’s a similar view at Rubicon Project.

The SSP is helping advertisers track their budgets through the programmatic supply chain in order to see how much of its money goes to each vendor involved in the auction. Rubicon Project is offering the service to advertisers that request it, rather than offering it as a standard. The insight is not, however, something advertisers have to pay for. It started in November when Rubicon Project gave publishers the option to provide their consent to disclose it tech fees, and the next phase is currently being worked on, which will offer “safe and efficient” transmission of that fee data to authorized buyers, said a spokesman for the company.

Rubicon Project’s push for transparency isn’t as grandiose as AppNexus’ play, but it does offer a glimpse of how the ad tech vendor will continue to try to differentiate itself in a market that’s consolidating around fewer but more trusted businesses.

Similar to AppNexus, Rubicon Project had been running first-price auctions and developing alternative ways to sell impressions in a more transparent way prior to last year’s backlash against SSPs. The endgame for a vendor like Rubicon Project, which must work out how to make up for the revenue loss from lower take rates and fewer auctions won due to header bidding, is to make bids in the open web every bit as efficient and accountable as they are in the walled gardens.

“Throughout last year and continuing into this year our ambition is to make transparency table stakes — not a differentiator, nor something to charge for,” said the spokesman. “Surely charging advertisers a fee to get transparency into taking rates is counter-intuitive. If anything, this move will hopefully encourage others in the industry to follow suit.”

Index Exchange agrees to a standard fixed fee for all ad spend through the exchange and the publisher is aware of how much the cost of each impression is. The SSP always submits net bids, which exclude the pre-negotiated fee that has been agreed with the publisher, so that they always receive all of the winning bid prices, the ad tech vendor said in a company statement.

While progress has been made on the sell side, buyers aren’t convinced the efforts from SSPs go far enough. Demand-side platforms, agencies and even some advertisers like BT are threatening to block those vendors that aren’t willing to stop manipulating auctions for their own ends.

“Getting insight into what happens on the supply-side is still a faraway prospect for me and my team,” said a senior marketer at a global advertiser on condition of anonymity. “It’s been difficult for us to recruit someone who knows enough about how that part of the supply chain works that we feel comfortable meeting with those vendors. We’ve hired someone now but getting that visibility is going to take some time.”

The cynic’s view is that the current crop of transparency initiatives from the sell-side don’t go far enough.

“Just focusing on knowing the amount some exchange took from a transaction doesn’t seem like a good use of energy. It makes you feel like you’re achieving transparency but there’s no practical purpose,” said an ad tech consultant who asked to remain anonymous. “What’s more actionable is if the SSP can get data from the exchanges they work with that will allow buyers to understand how the auction works. That information allows the marketer to know whether a fair auction is being run and decide whether they want to participate.”

More in Media

Publishers revamp their newsletter offerings to engage audiences amid threat of AI and declining referral traffic

Publishers like Axios, Eater, the Guardian, theSkimm and Snopes are either growing or revamping their newsletter offerings to engage audiences as a wave of generative AI advancements increases the need for original content and referral traffic declines push publishers to find alternative ways to reach readers.

The Guardian US is starting its pursuit of political ad dollars

The Guardian US is entering the race for political ad dollars.

How much is Possible’s future in Michael Kassan’s hands?

Some people in the know at Possible said they see the conference taking a bite out of Cannes’ attendance, most acutely by U.S.-based marketers who could save money by staying on this side of the Atlantic.