October 4, 2019
The digital advertising business is often opaque, and now 16 companies, banded together as Source, are calling for a more transparent pipeline as well as standards and best practices for sharing data on fees and authenticating content. Oracle and News Corporation, among the other ad agencies, publishers and ad tech firms, hope their efforts will boost digital advertising beyond behemoths Facebook and Google. Publishers have long stated that middlemen take too much of the pie in an expensive, clunky supply chain.
The New York Times reports that, “newspaper and magazine publishers, by some estimates, collect only 30 to 40 cents of every dollar spent on their ads online, compared with about 85 cents in the pre-Internet days.” Led by ad tech firm MediaMath, Source also includes Business Insider, Havas Media, IBM Watson Advertising, and White Ops.
“We’re trying to create new terms of trade to modernize the business,” said MediaMath chief executive Joe Zawadzki. “Seeing where every dollar goes — that doesn’t exist today.” MediaMath has spoken with Google — but not Facebook — about joining Source.
“This is just one effort, but it is trying to address the larger issue of whether the digital advertising business will be more like the open Internet, open to many, or will it be dominated by a few walled gardens?” said Randall Rothenberg, chief executive of the Interactive Advertising Bureau, to which “nearly all the Source participants, as well as Google and Facebook” belong.
Telaria chief executive Mark Zagorski added, “We’re trying to crack open the black box and compete on a different playing field than the walled gardens.” Source members have vowed to share data, such as verification of “the type of content they are supplying to meet quality and authenticity standards to guard against fraud.”
Other practices will require ad tech companies to disclose their fees. Rubicon Project executive Adam Soroca added that “buyers and sellers are looking to take more control of their business.”
News Corporation senior vice president Chris Guenther noted that, “moving to more open digital ad markets, giving buyers and sellers ample information on pricing and auctions, will take time.” “But this initiative is a step in the right direction — toward transparency,” he said.