Why is the programmatic ecosystem busy self-serving instead of collaborating?

Opinion

This industry could solve the Made for Advertising issue overnight. But it requires people and their companies to come together.

Not everybody in the industry may be paying attention, but right now the open internet is facing an existential threat.

The value exchange of access to free online content, funded by ads, may no longer be a viable business model for publishers. The loss of addressability from privacy changes will drastically limit the extent to which publishers can appropriately monetise their content and they are already feeling the strain from brands choosing to invest elsewhere into walled gardens.

If even broadcasters are wrangling with how to compete with the likes of TikTok for media budgets, then online publishers with razor-thin margins have similar issues to contend with.

How to solve MFA overnight

Reach recently shared in its H1 2023 results that open marketplace cost-per-miles (CPM) are indexing at 63 compared to 2019. This is while other touchpoints have seen the opposite trend with inflation pushing up CPMs — where social video ads experienced as much as 19% inflation in 2021 alone in the UK.

The fallout from the recent ANA report, where one in five impressions from programmatically executed campaigns were found to be delivered on Made For Advertising sites, has rumbled on since it was the talk of Cannes Lions this summer. This will be a cause for concern for premium publishers, as brands may look to broadly avoid programmatic media, given the report’s revelations.

There has been much commentary in the industry about how we can combat the prevalence of low-to-no-value domains that are still present in the programmatic ecosystem, but how much of that has led to action?

Digital media buyers would like to see more cross-industry collaboration between vendors to find solutions for these current challenges together, so collectively everybody will benefit — with derived utility for both brands & publishers.

Unfortunately, any ad tech press release or subsequent column is dominated by self-serving behaviour. With revenues tightening in the face of industry challenges, ad tech vendors are adopting what could be seen as protectionist practices.

Various supply-side platforms (SSPs, such as Magnite ClearLine, Pubmatic Activate) have taken steps to launch their own activation platforms, eliminating the need for any demand side interface to execute media campaigns with them. Similarly, some demand-side platforms (DSPs) have bypassed their supply counterparts to gain their own direct access to publisher inventory (The Trade Desk Open Path, Yahoo Backstage).

This heightened complexity is difficult for buyers to navigate and it creates a backdrop of tension in the marketplace, at a time where all players should be looking to collaborate. Adding yet more fragmentation detracts from the more pressing issues facing publishers and brands.

Some SSPs have been quick to disclose that they will now offer curated private marketplace packages that will feature no MFA domains.

While this is a positive development, why stop there?

If SSPs are able to discern which of their representative domains can be categorised as MFA, then why don’t they strip out this inventory entirely from their supply chains? This could solve the MFA narrative overnight.

It may seem like an extreme comparison, but is the programmatic ecosystem hooked on MFA monetisation in the same way that humankind is struggling to live more sustainably — despite the known damages and alternatives already available?

It’s incumbent on all of us to solve this collectively

The entire ecosystem should be pulling together, solving the important challenges — championing the interoperability of data, emergence of addressable TV, algorithmic attention optimisation that will be born from AI. Programmatic channels must be able to reach precise audiences, across quality inventory that promises high levels of consumer attention.

The buy-side is calling upon the supply-side to take more active steps to quickly strip MFA domains from their supply chains and redouble our efforts to focus on how to enhance brands’ ability to execute programmatic campaigns more effectively.

Solving for the upcoming identity challenges, we require innovation & collaboration to future proof our addressability & measurement capabilities. Let’s use AI to expedite the automation of said capabilities. This will take collective effort from vendors across the ecosystem to work together, not in isolation.

Any bad actors who are not engaging in these taskforces and are continuing to pump the ecosystem with MFA properties can then be ostracised from the top tier of demand platforms & agency rosters. So it will be incumbent on the buy-side to reward good behaviour, by acting responsibly themselves to exclude vendors not adhering to new best practices.

As the stewards of our clients’ investment, we are working with our trusted partners to develop solutions such as DIME to mitigate the risks that MFA sites pose to our clients’ bottom lines by ensuring transparency and quality of inventory. This is one solution to inventory quality, but we need industry-wide efforts to be all encompassing.

Ultimately, brands expect better. If these blights are not tackled head-on, then brands will choose to invest elsewhere and there’s no tempering the reach of big tech’s walled gardens.

Rob Georgeson is head of programmatic, Performics at Publicis Groupe media agency Zenith UK