Tick Tock, Black Box — Time Is Running Out

October 18, 2018

By Jeff Hirsch

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Black-box tech and the opaque environment it enables must be replaced with "clear box" transparency for the benefit of the entire programmatic ecosystem.

One of the most interesting things about the future of the ad tech industry is that you can see right through it. Or should be able to. I'm talking about transparency, of course. Right now, black-box technology is still an unpleasant — and increasingly unnecessary — fact of life in ad tech, and that's going to change. It's going to take a concerted effort on the part of all involved — marketers, publishers, DSPs, and SSPs — to make that happen, but that's already begun. The only question is how long the transformation will take. I think it will happen quickly — because it has to.

The primary force driving this change is straightforward: transparency provides significant benefits to the ecosystem. It's got something to offer all participants who are willing to embrace it. It builds trust and that accelerates budgets moving online. The only losers will be those that cling to the opaque environments of the past.

Money talks, and marketers need to take the lead by leveraging the purchasing power they wield here. Under Marc Pritchard's leadership, Procter & Gamble is setting a powerful example of how marketers can put their money where their mouth is. Speaking at the ANA Media Conference in March, he detailed the "mass disruption" steps P&G planned in response, many of which it's already taken, and urged other marketers to do the same. It reduced ad spending substantially with several big players, reinvesting that money into better-performing vehicles to deliver better outcomes.

The prospect of greater transparency in digital advertising ought to be particularly appealing to publishers, too. By taking a stand against black-box tech and demanding openness in ad tech mechanics, publishers will gain increased visibility into their own auction dynamics. Transparent solutions such as open-source coding can lift the veil imposed by black-box solutions and make it easier for publishers to verify code and adapt it to their benefit. Greater transparency will mean greater choice, control, leverage, and ownership of ad decisioning for publishers.

Calls for transparency often tend to focus on sell-side technologies, and with good reason. While we're already seeing movement toward greater transparency on the part of many SSP providers, more needs to be done. We need innovations and new business models that demonstrate beneficial results. DSPs have a role to play, as well. One important step they need to take is incorporating transparency into their decision-making processes around supply-path optimization (SPO).

Fundamental change is never an easy process, and making the leap to transparency in the digital advertising ecosystem will be no exception. What's needed to drive this pivot toward true transparency is for every participant to do its part, and for those with purchasing power to continue leveraging it to drive change. It's time to stop making excuses and start insisting on transparency. It's going to happen because it has to. I think we're going to be looking at a radically changed environment over the next couple of years.


Jeff Hirsch is the CMO and head of publisher development for the U.S. at PubMatic.


The views and opinions expressed in Marketing Maestros are solely those of the contributor and do not necessarily reflect the official position of the ANA or imply endorsement from the ANA.

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