The digital advertising industry is torn apart by two trends: on the one side, the rise of programmatic media buying provides more opportunities for increasing ad buying scale. On the other hand, precisely this trend has made it much more difficult to control ad placements and ensure brand safety. Even the biggest companies face the issue of ad misplacements. In this situation, marketers can either give up all the benefits of programmatic media buying, to protect the brand image or make peace with the fact that their brand can be harmed by unfortunate exposure. But is there a third option? Can industry do something to ensure safe ad buying on a scale?
Header bidding is a type of programmatic media buying that is aimed at tackling the issue of better access to premium traffic sources. Publishers that offer the most desirable placings open their inventory for bids before transmitting them to an ad server. For advertisers, header bidding is a better shot at getting premium placements and ensuring brand safety. For publishers — it provides better yield and more revenue.
Nevertheless, with all the advantages that header bidding brings to premium publishers, it’s hardly a perfect solution to the brand safety issue. The technology layers that allow simultaneous bidding on premium inventory, as well as user-based targeting, decrease the transparency of the traffic sources. Advertisers simply don’t see where they buy ad impressions and cannot check the placements after they are purchased. What makes header bidding work for advertisers is a partnership with top-tier publishers only and trusting that they’ll share ad space only with top brands.
Header bidding enables competition among demand partners from open marketplaces and PMPs — private exchanges where only selected partners are allowed. Private marketplaces give access to vetted and classified inventory supplied by premium publishers. Only accredited advertisers can bid on this inventory, which helps to ensure the quality of ads and in general, reduce brand hazards.
This arrangement is generally perceived more reliable than open RTB exchange and header bidding because marketers have a clear idea of the audience and content that the publisher provides. But at the same time, the cost of premium inventory is higher. The eCPM rates for publishers in private marketplaces is higher than average on open RTB marketplaces and shows strong year-on-year growth.
Unlike private marketplaces, where a group of players is allowed to participate in the trade, programmatic direct media buying anticipates that advertiser buys guaranteed ad impressions from a selected individual publisher. Although this type of agreement requires previous negotiations, it is still conducted programmatically and the ads are served in real time. But instead of using the technology of publishers, advertisers rely on their own systems and ensure the delivery of the message when they see fit. The brand’s commitment to buy an agreed number of impressions helps to secure publishers with income. And advertisers can get the most control over brand safety, being sure what they buy and from whom.
The downside of this media buying technique is also the price. Premium publishers that can guarantee the number of impressions on scale are scarce, and the cost per thousand impressions is high because of the competition among brands for the best spots. The enthusiasm on the market for a more transparent and direct arrangement can help grow direct programmatic advertising, but the question of the available volume of impressions is still open.
Is there a future for open RTB marketplaces?
All of the widespread programmatic techniques, which can reduce (but not eliminate) brand hazards for advertisers, have the limitations of scale and price. Brands have to give up the main advantages of open RTB marketplaces — access to unlimited inventory across thousands, even millions of publishers in real time — in order to be sure that their ads don’t end up in the wrong place. It seems that the industry is self-imposing limitations. This is good for rewarding premium publishers but leaves out in the open the majority of middle-sized brands. The ones that would like to access vast audience in a reasonably safe environment, but don’t require hand-picked ad placements.
But it is also clear that advertisers and publishers alike can fully enjoy the benefits of open marketplaces only when the industry accepts some general regulations on brand safety.
However, there is also an urgent need for developing better understanding of what brand safety actually is, defining the rules of sharing a transparent media context and realizing how to avoid unsafe placements. Both advertisers and publishers need to take responsibility for better ad experience on demand and supply sides.