Promoting Inventory Quality in Programmatic Advertising, #2
James Prudhomme from Index Exchange goes deep on the need for more transparency in our industry
It’s been more than a year since we launched SQX — the Supply Quality Index that factors inventory quality into our programmatic bidding logic. While the SQX algorithm is collecting data, and our engineers are continuously refining its logic, we also keep close contact with our supply-side partners to share our knowledge and experiences.
Today, we’re excited to share an interview with one of these partners, Index Exchange, represented by James Prudhomme, digital marketing hero and Manager Director EMEA. Index Exchange provides a neutral, transparent exchange layer that enables leading publishers and suppliers to sell their ad impressions in real-time. Formerly known as Casale Media, Index equips enterprise-level sellers with custom-architected solutions, fully transparent sell-side management technology, and access to the latest in technical knowhow for programmatic demand.
We spoke with James to learn more about what inventory quality means from a supply perspective, and how the industry can work together to tackle challenges like fraud, transparency, brand safety and viewability.
James, how do you perceive the ongoing debate about quality in programmatic advertising in the industry? How has this affected your business?
Quality is one of the most important issues for both brands and media owners to contemplate, as more and more of advertising impressions are delivered programmatically. Programmatic buyers want bespoke control over the environments they deliver ads into, ensuring quality, safety and viewability. Media owners demand the same level of control and want to ensure the quality of ads running in their environment matches the quality of audience they work hard to attract.
As a transparent exchange, the role of Index Exchange is to empower both buyers and sellers. We’ve developed robust tools that provide the level control they demand; these tools also ensure complete transparency ensuring both parties to the transaction are in full view of one and other. We’ve also implemented a human verification system which provides quality control ensuring a zero percent failure rate.
I find the debate you refer to interesting as I feel very strongly that there should in fact be no debate on this issue. I have often heard people say there should be a tolerance for quality in programmatic — in other words, advertisers and publishers should accept that sometimes ads will be delivered inappropriately. I don’t accept this.
Index is the only exchange which provides publishers with the option to ensure the human verification of every ad and creative which runs in our system. We also hold buyers to account by not allowing them to rotate creatives within campaigns. A new creative means a new campaign and a requirement to run the human verification process again.
The human verification team requires resources to build and manage the tools, but we feel this is cost of entry, so to speak, and believe it’s the only way our exchange can deliver on the quality promise for both sides of the transaction.
Index Exchange works with both publishers and programmatic buyers. How do quality requirements differ between these two stakeholders?
I’d argue that while the specific requirements might differ somewhat for each participant, the fundamentals remain the same. Transparency and control are the most important factors. Publishers demand tools that allow them to either allow or block ads at the brand level, and they demand an accurate taxonomy to facilitate this. Buyers and brands want the same level of control. We have seen a trend over the last number of years by which buyers have moved from using blacklists to using whitelists. This illustrates the bespoke control which they want to exercise over the environments in which their ads are delivered.
In any case, neither buyers nor publishers can have control without transparency. Exchanges simply cannot allow buyers and sellers to be obfuscated from one and other. Transactions must be conducted out in the open.
Transparency is becoming a crucial issue in the programmatic industry. Many question the “black box” nature of the second-price auction that makes it impossible to assess what’s happening between a buyer’s bid and the clearing price. How do you address this issue?
At Index Exchange, transparency is at the core of everything we do. It’s more than something we have built into our product and our reporting; it is a core value and at the very fabric of our culture. In a piece I wrote for ExchangeWire back in March I provided a very clear and simple definition of programmatic transparency. I’ll reiterate it here:
The seller sees the winning bid price (not just the clearing price) and knows exactly who the buyer is. The buyer understands exactly where their ad is being placed and knows the floor price is not going to dynamically shift beneath their feet. Fees are deducted in plain sight and there is no chicanery happening within the exchange; in other words, it is a true second-price auction.
To address your point head-on, I would argue that it is not impossible to assess what is happening between a buyer’s bid and the clearing price. For publishers it is simply a matter of asking your exchange partner to openly and transparently share the data. If your vendor will not do this, then I would suggest looking for a new partner.
At Index our view is clear: when a user places a bid on a media owner’s impression, that data is the property of the publisher. This is clearly reflected in our legal terms and conditions. We very transparently share the entire bid landscape with the publisher, and they can see not only the clearing price but also the winning bid price. This provides 100% clarity and confidence into the way we conduct our auctions.
This of course has the added value of demonstrating to both parties in the transaction that there are no hidden fees, no “variable non-transparent buyers fees” and no technology taxes.
Amongst other topics, ad fraud, viewability, brand safety, transparence and inventory quality are recurring concerns in the Programmatic industry. How can buyers and exchanges work better together to ensure higher quality?
I believe our industry has an amazing opportunity ahead of it. We can come together in order to establish a set of open standards, software protocols and common formats which would create the kind of trust and transparency we see today in industries like financial services, healthcare, air travel and connected automobiles. Surely if mission-critical systems upon which people’s lives depend can be built on open standards, then we can do the same in programmatic advertising.
The Open RTB Protocol was a big step in this direction and the industry continues to collaborate in the development of this standard. Index has always been a big supporter of the Open RTB standard and continues to support the great work of the IAB Techlab.
These standards encourage innovation and allow programmatic companies around the world to connect with one another using a common technical language. Our industry simply has to keep moving forward on this. Individual companies must support these initiatives and get involved.
Last year, Sociomantic launched SQX, as the first programmatic buyer to factor quality of suppliers into the bidding logic. Where do you think the broader industry is at when it comes to promoting quality?
I commend Sociomantic for their efforts around quality and transparency. What I like most about the SQX initiative is that you put your money where your mouth is, so to speak.
“Sunlight is said to be the best of disinfectants.” The second half of that famous quote is: “Electric light, the most efficient policeman.” In an environment that is clean and transparent, bad actors have nowhere to hide. In my view, Sociomantic is allowing sunlight to shine directly into their supply chain.
From an industry wide view, I think a lot of progress has been made and the shift to more transparent models like header bidding have done a lot to place a focus on quality.
Want to read more about quality in programmatic advertising?
Read the first post in our series.