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Programmatic transparency: Time to take it seriously

Without a doubt, ‘programmatic’ has become a buzzword in advertising circles in recent years, with more and more advertisers dipping their toes into the waters of automated media trading in pursuit of supposedly improved cost efficiency, enhanced targeting, and better return on advertising investment. In order to jump on the programmatic bandwagon, most advertisers have opted for agency trading desks** (ATD’s) which have largely “gifted” their client billings by their sibling media agencies.

However, owing to the prevalence of non-disclosed programmatic trading model in this part of the world including Hong Kong, advertisers often do not know where the heck their money is going, or how much is being paid in fees, commissions, and mark-ups, what DSP’s and media inventory are available in the market, what kind of data (particularly first-party data sources such as website, CRM, campaign etc.) and how it is being used and “protected” by their ATD. With agency trading desks becoming increasingly complex and opaque, it’s time for advertisers to put transparency under the microscope to open up the black box of current market practices, with strong contractual underpinning. More importantly, in the era of big data, they should take back control of their programmatic agenda, especially on the aspect of data access and ownership, so as to redress the balance in their favour.

While few advertisers are obliged to use the ATD affiliated with their media or digital agency, they should fight for their freedom to use whatever trading desk solution they want. With proliferation of independent trading desks (ITD’s) in the market, they should shop around more, as this can generate more competitive pressure in the market, which in turn will result in better transparency and a healthy development of the fast-evolving programmatic ecosystem. When making their selection, advertisers need to be aware that not all trading desks are created equal and take note of the issues associated with the aspects of data leakage (is data from my media investment used to benefit other advertisers of the trading desk?) and undisclosed margins (is my agency “selling” pre-bought inventory to me with undisclosed mark-ups?).

In all fairness, if a programmatic provider is working in a marketer’s best interests, it should be buying audiences and inventory transparently in real time instead of through bulk buying of pre-bought inventory. Meanwhile, it should be doing its utmost to protect its client’s data. After all, advertisers should have full ownership and control over their data, be able to access their data freely, and if necessary, employ an enterprise private data management platform or PDMP (a single-tenant, data repository used for storing customer data derived from online behaviour, including website visits, to build profiles of each individual and allows a full control of where and how your data is stored or managed) to ensure this happens. Without transparency and control over campaigns, advertisers can’t step in and ask for a customized media strategy.

Advertisers should stand up for their right to vote for greater transparency which is more than just making a pledge or commitment and needs to be woven into the fabric of today’s business world. It builds mutual trust and strengthens partnerships. They need to revisit their current media agency contracts to push for a disclosed trading model from their ATD’s. And I sincerely hope that the rest of the industry would take it seriously.

Should you have any query regarding programmatic advertising and data management platform(DMP), feel free to contact jackson.kwok@xhorizongroup.com for enquiries.

**What’s an Agency Trading Desk?

Forrester Research’s definition: “A centralized, service-based organization that serves as a managed service layer, typically on top of a licensed demand-side platform (DSP) and other audience buying technologies; manages programmatic, bid-based media and audience buying.”

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