MediaMath’s Tough Love Doesn’t Go Far Enough

“The Sell Sider” is a column written by the sell side of the digital media community.

Today’s column is written by Jochen Schlosser, chief strategy officer at Adform.

MediaMath recently announced it would stop buying from supply partners that manipulate auctions via bid caching, wrapper misuse and other tactics.

This is a welcome move from MediaMath and yet another step in creating an open and transparent ecosystem. However, the industry needs to go even further.

Continuous supply partner management, research and optimization efforts are an absolute necessity for our industry, and an agreed-upon standardized code of conduct for suppliers is a worthy pursuit within the ad tech space. MediaMath’s code of conduct represents a strong start in this direction, but one critical aspect is missing: management of traffic duplication.

In many ways, traffic duplication, through practices such as header bidding, is the greatest auction game of all, and it’s a concern for many reasons. By running parallel auctions to largely duplicated demand pools, sellers create false liquidity and thereby increase yield.

This has negative effects.

For platforms, it results in additional QPS and infrastructure costs. For end buyers, this duplication can lead to problems such as competing against oneself in auctions. Ultimately, traffic duplication makes it hard to judge the optimal supply path. To address these problems when duplication exists, buyers should be able to select the supply path based on take rates, speed, quality, performance and other factors.

Our industry can address the challenge of traffic duplication through proper supply-path optimization. The main challenge for ad tech companies is detecting duplicate requests hitting their servers. The industry, through IAB’s OpenRTB 2.5 protocol, has introduced the Source Transaction ID, which is a unique ID per auction that must be common across all participants in the bid request, such as multiple exchanges. This ID enables the identification of duplicate requests resulting from the same header wrapper, site and placement.

To date, only a handful of supply-side platforms (SSPs) have adopted the Source Transaction ID with limited overlap, making the IDs essentially useless. The ID needs to be generated within the header bidding wrapper on the publisher’s page. Therefore, its utility depends on adoption by the main header wrappers ­– Prebid.org, Index Exchange’s Header Tag and Google’s server-side solution, EBDA ­– to pass this information downstream.

It is incumbent upon Prebid.org, Index Exchange and Google to push adoption of the Source Transaction ID for the programmatic ecosystem as a whole to scale. Adoption of the ID would eliminate the need to pass along infrastructure costs and instead enable the supply chain to give this money back to the advertisers. Unfortunately, SSPs and wrapper solutions lack a direct incentive to allocate resources to pass the Source Transaction ID.

Our industry must commit to the adoption of Source Transaction IDs and other initiatives that bring transparency and clarity to the digital supply chain. MediaMath is on the right path. As an industry, we need to go a step further.

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This post was syndicated from Ad Exchanger.