Why programmatic buying still requires people

Doug Conely: vice-president of product strategy and operations at Exponential
Doug Conely: vice-president of product strategy and operations at Exponential

Be careful removing the personal connection with programmatic trading - what do you expect when you pay pennies for media, warns Doug Conely, vice-president of Product Strategy & Operations at Exponential.

The revelation from AOL's chief executive and chairman in a recent Campaign interview that programmatic buying was one of the two pillars on which the company will be overhauled, highlights the increasing prevalence of the technology in the online display marketplace.

However, there are two flavours of "programmatic". The first is all about increasing process efficiency (and reducing costs) with technology. The second is all about aggregating supply access (and reducing price).

One of the great benefits of this second flavour of programmatic online display trading and one of the key ways in which it's changed the historical role of the buyer and seller, is that they no longer need to have a personal or even commercial relationship.

Whatever you think about the absence of a personal relationship in buying and selling, the recent flurry of news and opinion around fraudulent ad impressions – be it fraudulent sites, traffic or ads – has shown that this "benefit" is also a great flaw in a non-standardised industry.

Not pork bellies after all

Wenda Harris Millard, a leading figure in the US online display industry, said in 2008 that we must "not trade our assets like pork bellies." At the time, she meant that programmatic approaches would commoditise online display media.

Now, with increasing risk of fraud, we know that online display isn't like the standardised, regulated industry of pork bellies at all. If you think about the revelations about horse meat in the food chain a few months ago, we see that all industries are similar – knowing your supply chain often means having relationships with the people involved.

Those relationships allow buyers to manage two high-level fraud risks: fraudulent sites and fraudulent traffic. This is part of the value that companies in our area bring to their clients.

Fraudulent sites

As with any supply chain, there are unscrupulous sellers in the marketplace who will try to get ad spend on fraudulent sites. There are three elements to minimize the risk of fraudulent sites appearing on a media buy:

  • Firstly, subscribe to (and use) the IAB/ ABCe International Spiders & Bots list.
  • Secondly, have the team and guidelines in place to manually review each domain that enters the network (this also helps curate a brand-safe environment). Publishers with no trading history and suspicious traffic patterns are easy to spot with simple checks and balances before they come on board. In that review, each publisher should submit a list of domains from which they will call ads.
  • So, thirdly, the final protection is that any ad called from outside the approved list of domains should be rejected. Tag hijacking, where tags given to "good" domains are passed onto "bad" domains, is still surprisingly common.  There will be situations where the referring domain cannot be seen, either because of nested iFrames or masked ad calls.  However, these are often the biggest areas where trouble can occur, so it is important to make no exceptions here. The domain must be seen and approved.

Fraudulent traffic

Sometimes the publisher is not directly at fault, but is the victim of hosting fraudulent traffic. A publisher should know and monitor its own sources of SEM, social marketing or exchange links. If traffic is spiking and it seems too good to be true, well, it probably is.

As a media buyer though, the first step is to screen out robotic traffic, using a combination of the same IAB/ ABCe Spiders & Bots list, as well as algorithms that can detect robotic behaviour (even well-disguised).

The benefit of a long-term relationship is that there is a history between two businesses. Long-term traffic volume and performance metric data can be compared to recent history. Any new trends or statistically significant variances can be identified and investigated quickly and robotic detection algorithms tuned accordingly.

Chasing opportunities

But how could fraud happen in an exchange environment? I won't cover old ground on whether it's a supply-side or a buy-side problem, but our observation is that without a long-term relationship between buyer and seller, it's easy to see how and why a demand platform could chase pockets of high-performing, low-cost inventory without the checks and balances in place.

To use an analogy: If you go to the local market to get a Rolex there’s a very small chance that you'll get a real Rolex at a bargain price. If you're lucky, you get a watch that does a job for you, but more likely, you just get rubbish. So with media. What do you expect to get when you pay pennies for media?

What about fraudulent ads?

Fraud goes both ways, of course. If you're in a long-term relationship, it lets you vet your supply more thoroughly but it also becomes your obligation to ensure no fraudulent ads run across that valuable supply.

Hindsight as a perfect science

It would be hubris for a business like ours, which has worked hard to maintain direct supply chain relationships through the programmatic frenzy, to say "I told you so", but fraud is now a clear issue for programmatic buys. The industry has continuously shown an ability to raise its game to meet such challenges.

If not hubris, there is at least a little bit of irony that the result of a heightened awareness on fraud will mean many platforms looking a lot more like the ad networks they have tried so hard to replace.

Doug Conely is vice-president of product strategy and operations at Exponential

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