Advertisers once again try to crack open the secret sauce of platforms, this time with a savvier touch
Advertisers are back at it, trying to get platforms to lift the veil on their ad-selling secrets. But this time, instead of the usual chest-thumping demands, they’re being more pragmatic. Think less “storm the gates” and more “savvy negotiation.” They’ve learned from past failed crusades that a little less dogma and a lot more diplomacy might just get those kimono strings untied.
Their strategy? Asking giants like Google, Meta and YouTube to commit to proposed standards that, at least in theory, will shed light on how these platforms manage auctions for display, search, social media and video ads.
That’s according to a letter sent earlier this week (June 10) by the Media Rating Council’s CEO George Ivie and its vp of research and standards Ron Pinelli to members.
In it, the auditing firm outlines that the plan, which has been prompted by Omnicom Media Group and 4A’s, aims to standardize practices, policies, measurement, reporting and transparency into online ad auctions, spanning programmatic to search and everything in between. Seeing potential in the plan, the MRC’s leaders sent the letter to members to get their nod to kick off the project, as is customary.
Moving forward, the standards will be set in collaboration with a large working group of MRC members, audited services and other interested parties.
“Given the scope and expected impact of this project, the 4A’s, WFA, ANA and OMG were specifically keen that the MRC lead and manage this critical and crucial industry project,” said Ashwini Karandikar, the 4A’s evp of media, tech and data. “The MRC and its members are mindful that all participants in digital ad auctions must remain free to make their own judgments about business practices in the auction ecosystem.”
It’s not the first time organizations like this have united against the platforms. In fact, it’s become a bit of a tradition to huff and puff without ever blowing the house down. But that was arguably the problem; in their attempts to get platforms to adhere to their terms, these earlier efforts didn’t compromise enough. They were too dogmatic.
This time, pragmatism is the name of the game, according to one ad exec with knowledge of the plan. Its stakeholders aren’t obsessed with cramming auctions into a single, unified system — they know that could be a step back. Instead, they’re proposing something entirely different. The gist of it is this: Online auctions are like a mix of different games, each with its own set of rules depending on whether it’s ads on a search engine, a social network or even CTV.
But like any game, these auctions are only fair if the rules are clear. Otherwise, it’s an uneven playing field for those in the dark. That’s the advertisers’ stance. They want to understand the relationship among bids flowing into an auction, the selection of winners and the determination of prices — the essential job of any online auction, and advertisers want to see how that magic happens.
They also want to know the outcome of participating in those auctions — that age-old question: Did they get what they thought they were paying for?
Whether they get to fully peek behind the curtain of these auctions is debatable for several reasons. For one, advertisers don’t need to sift through a detailed report on billions of auctions to understand what they bought. Besides, that level of granularity is something the platforms might not be comfortable with for various reasons.
What’s more likely, based on early proposals, is that they’ll receive aggregated intel on those auctions. The finer details will be ironed out as the standards are ratified.
When this moment arrives is anyone’s guess — unsurprisingly. Standards are never established on a fixed timeline, especially when consensus has to be reached among multiple parties — hundreds of them in this case. Still, the plan is to first gather the necessary data and information and then work to write the standards within a year. From there, it will likely take another six months to a year for them to materialize in the market.
Once those standards are ready, the MRC will be tasked with looking under the hood of all these auctions — under NDA, of course — to report back to advertisers that they’re being run in a way that conforms with the standards. This way, both groups are happy: Advertisers feel reassured, and the platforms don’t feel like they’re sharing trade secrets or sensitive information.
But that won’t be the end of it. The plan is for these standards to eventually include how bids are placed, not just where they’re placed. Think Performance Max, Advantage Plus, Performance Plus and all the other AI-driven technologies advertisers are increasingly using to buy from those auctions. The only reason they weren’t the initial focus is that they’re not as ubiquitous as auctions and thus wouldn’t resonate with marketers in the same way.
“Omnicom Media Group has a long-standing commitment to advocating for standards across investment channels, primarily through our Council on Accountability and Standards in Advertising (CASA) initiative, which we began in 2020,” Ben Hovaness, chief media officer for Omnicom Media Group agency OMD, said. “With ad auctions accounting for an estimated $550 billion in global media spend this year and growing, the need for transparency and standards in this investment ecosystem has never been greater. Working in collaboration with MRC, the 4As, the ANA and WFA we’re committed to meeting that need for our clients — and for all marketers”
To some observers, the timing of this latest pursuit of transparency in online advertising might seem odd. After all, marketers continue to pour money into these auctions despite knowing they’re essentially black boxes. But what’s clear is that the more money they spend in these auctions, the harder it gets for them to accept the trade-off — higher returns at the expense of some budget being wasted.
However, opinions over the likelihood of the latest venture delivering results are split.
One source, who declined to be named given the political nature of anything involving the MRC — the nonprofit organization was established in 1963 at the request of the U.S. Congress, therefore many industry figures are wary of publicly commenting on its initiatives — described such hopes as unrealistic.
“It’s nice that they [MRC] are trying to use their brand of ‘perceived industry arbiters’ to generate more accreditation programs, but that’s not how any of this works,” said the source, noting how companies such as Google and Meta can cite user privacy when it comes to revealing how their platforms operate.
“There definitely needs to be more scrutiny around how any black-box algorithm performs, especially when billions of dollars have been spent by marketers and agencies letting three to five companies grade their homework incorrectly and inappropriately,” said Matt Prohaska of Prohaska Consulting. “But we think there are better organizations suited to evaluate the effectiveness, with a different mission, history, experience and available resources.”
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