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Transparency (or the lack of it) in programmatic buying was the elephant in the room last week at Marketing magazine’s AD-Vantage Programmatic Trading Conference. And Ian Hewetson, VP of Client Services for ad server and demand-side platform Eyereturn Marketing, made sure to address it during his morning keynote session.

“You’ve got a lot of different players in almost every single programmatic buy,” Hewetson (pictured, right) told a packed room on Tuesday March 31 at the Bram and Bluma Appel Salon in the Toronto Reference Library. “You’ve got the site, the supply-side platform (SSP), the exchange, a demand-side platform (DSP), maybe you have a verification vendor, maybe you’ve got third-party data in there, and an agency trading desk too.

“More players can often equal less transparency,” Hewetson added. “Every player takes a cut of that budget. And the more players there are the more budget that goes to those cuts.

“How much is each cut? It’s sometimes difficult to tell… because transparency is often resisted at every step of this process.”

Digital media transparency is a top-of-mind issue for many marketers in 2015, as more become aware that somewhere between 25 and 50% of their digital ad spend is going to waste, either through bot fraud, malware and ad-supported piracy, ad-viewability discrepancies, advertising volume rebates or arbitrage – where a media agency or network buys bulk online inventory and resells it almost immediately at a higher price.

While Hewetson acknowledged arbitrage is commonplace in most industries, he reasoned that sellers who have pre-bought inventory are motivated to unload it.

“If you are a buyer, you could actually end up buying inventory because your seller has this on their hands and want to get rid of it,” he said.

Hewetson also pointed out that technology vendors that are also media owners can be problematic for advertisers, as that arrangement creates suspicion that the vendor is favouring its own impressions. Ditto for platforms that act as both demand-side and supply-side platforms, Hewetson said, since they must satisfy both the buyer’s desire for low cost impressions and a publisher’s demand for the maximum return.

The transparency theme continued throughout the rest of the day’s sessions, including a panel featuring three representatives for agency trading desks.

Veronica Holmes, President of Digital at ZenithOptimedia, said advertisers needed to educate themselves about the programmatic process.

“I think the more informed advertisers are and the more questions they ask, the better,” she said.

The ACA is taking steps to tackle the issue of transparency, working to establish guidelines and standards for safe trading that an independent third party can certify. It is also working with the Canadian Media Directors’ Council (CMDC) and the Interactive Advertising Bureau (IAB) to form an “online accountability task force” to assess and address digital media fraud and transparency issues.

In the meantime, advertisers can help ensure their digital ad dollars are being properly invested by following these five steps:

• Ensure all internal stakeholders have an understanding of the issues
• Be sure to ask questions of your media agency
• Seek total transparency throughout the digital ecosystem and validate and audit processes
• Demand accountability from both partners and the industry at large
• Update the terms of your client/agency agreements

Need help with updating your services agreements? The ACA’s updated edition of its Marketing Communications Services Agreement publication provides best practices to guide advertisers with both digital and traditional media buying relationships.

Photos courtesy of Pam Lau/Marketing Magazine