Trusting the Trade: The Hunt for Transparency in Digital Advertising 

Most of us wouldn’t buy a house using the same realtor that is also representing the seller. We’d want to know if our financial advisor was receiving incentive compensation from the companies whose products they recommended. Likewise, it might raise eyebrows if a procurement decision maker for your company suddenly got an unexplained gift from the winner of a recent RFP.

There are many reasons why steering clear of conflicts of interest is important: conflicts of interest can corrode trust, compromise integrity, and have an adverse effect on a business’s results and outcomes. Yet, these scenarios are all too rampant in the digital advertising space.

Sell-side platforms own buy-side platforms and vice versa, and some platforms even have a significant amount of owned and operated inventory available on their own SSP or DSP. Consequently, publishers offering inventory, and the advertisers purchasing it, can’t be confident they’re part of a straightforward transaction.

Of course, there are the recently revealed discoveries by the Department of Justice around digital transaction manipulation and anticompetitive behaviors by some of the largest advertising technology companies.

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These conflicts of interest are only magnified as the industry pursues greater consolidation.

As a leader of one of the largest independent DSPs, I’ve heard these concerns, and raised them myself. Looking at the buy-side specifically, it’s a valuable exercise for advertisers to consider where their technology partner earns its money. Is most of their revenue derived from owned and operated inventory sourced from other elements of their business? Or is most revenue derived directly from servicing the buy-side? Unfortunately, not every company is that transparent, but it’s a worthwhile exercise to check. No one likes concealed fees or surcharges in their personal transactions. Why should any brand or agency accept that when transacting for their digital advertising?

That said, I’ve observed a couple of silver linings in recent years. First, more and more ad tech players are committing to open standards to bring greater transparency throughout the industry, so marketers and their agencies can be more confident they’re getting a fair shake. The IAB and the IAB Tech Lab have taken an important leadership role in creating more transparency and standards for the entire programmatic ecosystem.

Second, publishers are increasingly promoting greater supply path optimization (SPO) – particularly in the connected television (CTV) space. The most effective SPO initiatives are focused on removing non-value-add resellers, which, in turn, creates more value for publishers and advertisers alike by reducing Tech Tax while also cutting down on unneeded transactions and the related carbon that accompanies them. This represents a good model for the broader Open Web moving forward as eliminating potential conflicts can – and will – yield more cost-effective, efficient, and sustainable campaigns.

The digital ad world has its ups and downs, but greater transparency and elimination of conflicts of interest is something we should all strive for. After all, much like buying a house from a realtor that represents both buyer and seller, there’s always the lingering question of whose interests are being prioritized. As an industry, we can simply do better.

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