Digital Advertising Has a Transparency Problem. How Can We Fix It?

May 28, 2020 — by MediaMath    

This post originally appears on the Oracle Data Cloud blog here

Current state of transparency

As one of the biggest monetary drivers of the internet, it’s undeniable that the digital advertising market is a powerful economic force. And with good reason—one of its hallmarks over traditional media has been the ability for marketers to measure the effectiveness of their ads, connecting the dots between ads and consumer engagement. However, there remains ample opportunity for improvement to achieve and maintain a certain level of transparency among all players in the digital media supply chain.

As billions of dollars are poured into programmatic each year (and growing), it’s a wake-up call to the industry that 40 percent of CMOs do not trust the process. Further, as digital advertising technology advances and becomes more robust, new challenges have surfaced thanks to a crowded, fast-paced, algorithmic-dependent space. And in these uncertain times when marketers are pausing their ad spend and reducing their budgets across the board, they are primed to be hypervigilant about the vendors they choose and the company they keep.

Who’s involved

The digital media ecosystem includes many intertwined participants: publishers, advertisers, agencies, data providers, social media platforms, technology vendors, and more. One bad actor can create a domino effect that muddles the entire process. However, pinpointing who to blame when things go haywire is a challenge in itself, as almost six in 10 ad operations professionals citing it is difficult to track down unauthorized players.

What issues need clarity first?

The most pressing example of the need for transparency is the problem of ad fraud. According to eMarketer, recent estimates for lost revenue to fraud range from $6.5 billion to $19 billion—a vast scale that also highlights the industry’s struggle to nail down specifics in an ever-evolving game of whack-a-mole.

Automation and ability to maintain anonymity are big triggers in the proliferation of fraud in digital advertising. And despite the common notion that it only affects advertisers and publishers, ad fraud does pose a real threat to consumers.

Driving this point home was last year’s discovery of “DrainerBot,” a devious advertising bot that infected various mobile apps, driving up data charges for thousands of innocent smartphone owners.

Beyond fraud, other areas in the digital advertising industry that remain under constant scrutiny are continuing obscurity in allocation of ad spend, the ways in which programmatic algorithms work, and lack of clarity into level of risk across the landscape. What can stakeholders do to fight a reputation of ambiguity and facilitate a new standing of thoroughness, built in trust?

A collective push toward accountability

Thankfully, the industry is already taking measures to clean itself up and gain back trust. Various trade bodies have stood up transparency-based initiatives and are remaining steadfast in creating a more trusted environment for publishers, advertisers, and consumers.

Three of these initiatives are 4A’s Advertiser Protection Bureau (APB), MediaMath’s SOURCE, and IAB’s ads.txt. Themes from each group include pledges promising responsibility, thoroughness, and enhanced validation practices.

This all points toward progress. But even as the industry pushes for broader accountability, it will ultimately come down to the willful engagement of each and every participant including advertisers, publishers, and tech vendors.

Compacting small adjustments to make a larger impact over time and maintaining higher standards in every part of the process will have a powerful influence on the state of the digital ecosystem.

With great responsibility comes great trust

In pushing for more transparency in ad spend allocation, algorithms, and vigorously tackling ad fraud, the digital media industry will continue to confront some of its greatest challenges. It will take time and there will be setbacks, but the endgame is worth the fight.

Because the opportunity for the industry to truly embrace its responsibility as a powerful player in the digital space is one that could not only improve the sentiment toward internet advertising, but also even uplift the entire online experience.