An open letter to the advertising punditry

Or why talking about closing the barn door after the horse has bolted is not going to find the damn horse

Dear [industry exec or journalist who suddenly jumped on the scandal-of-the-week bandwagon],

I appreciate the commitment to focus more on [made-for-advertising | cookie stuffing | chameleon sites | running on off-network sites with no transparency]. Since all of these behaviors have been happening for at least a decade, it’s great that you’ve finally noticed and written such a passionate piece about how the industry needs to clean up its act and how buyers should really give more of a shit about [this issue].

Here’s the reality. You can get fired for wasting money on a bunch of crap in any job, and the people who work at advertisers and agencies know this. Therefore, shockingly, they don’t want to admit they are buying a bunch of crap. Ian Whittaker explains this elegantly here. Or as Upton Sinclair put it, “it is difficult to get a man to understand something, when his salary depends on his not understanding it.”

What buyers actually do, the smart ones at least, is some sort of marketing mix modeling that looks at incremental revenue by media investment channel. When you hear a head of media at a big brand say “fraud and waste are priced into programmatic” what they are saying is that they are allocating investment based on the net, not the gross. I was looking at the media plan of a large advertiser recently and the plan was split out like this: YouTube, sponsorships, Trade Desk. Under Trade Desk was the entire open web and streaming. If Trade Desk wants to grow their top line, they have to drive real performance when the advertiser does the math at the end of the year. From the point of view of the marketer, Trade Desk is a synonym for programmatic. And when these stories come out, do you know what Trade Desk does? They point at all of their independent efforts to clean up the ecosystem and then they point at their return on ad spend and say “don’t worry.” This is exactly where all the conversations about PMax transparency are going to lead, because Google has realized the same thing: at the end of the day it’s all about delivering marketing results to the advertiser.

I’ve been observing and trying to fight back against the shady underbelly of the programmatic industry for literally as long as there has been a programmatic industry. I’ve seen first-hand the tension at AppNexus when we would try to turn off a client for sketchy behavior. The client would immediately call their account manager and protest; often I would get a phone call from the client’s CEO talking about how clean their business is and how this was just a mistake. My commercial team would say listen, I get that we want to do the right thing here, but I don’t think I can hit my numbers this quarter if we turn these guys off. The data science team would start getting pressured from all sides: “I know you found a few sketchy things, but are you positive this is fraud?”

In the end it had to be me, the CEO of AppNexus, saying to the company and the board that 1) we were not going to take revenue into account when making decisions about quality and 2) we were changing our mindset from “innocent until proven guilty” to “guilty until proven innocent.” I personally got involved in the Inventory Quality reviews to make sure that the data scientists weren’t pressured by the business and could find the patterns – like ww3.forbes.com – and go after them. The truth is that they were incredibly easy to find once we started looking for them (noting that as an end-to-end platform we had very good data quality; it would be hard if you were just a DSP to see what’s happening in front of the SSP).

If you look back at what happened when I made this change, I was outright pilloried by the industry. “Brian O’Kelley admits AppNexus has a fraud problem” and so forth. I ended up kicking out clients representing about 30% of the traffic on the platform, but interesting only about 3% of spend, because they were all reselling to each other to launder the traffic through the programmatic ecosystem. Because of the revenue reset, we had to do layoffs. It sucked, a lot, and took a while to rebuild our reputation (ironically, since our competitors were still doing exactly what they were screaming at us for stopping) and business took a bit to bounce back. But it did, and we were able to launch our ad server and video products and credibly walk into the largest brands and publishers and deliver at a level that nobody else in the industry except Google could… and that is why AT&T bought us for $1.6B. Because we did the right thing and took our lumps. Trade Desk is very similar here – Jeff, Jud, and team have been cleaning up their supply chain and it’s paying off big time.

There is a systematic solution that seems obvious… auditing ad tech companies for adherence to standards. The industry is upside down: we have MRC accreditation for “verification” solutions that sit outside the value chain, but no concept of holding companies accountable for doing the right thing in the first place. In practice that means that companies fall into two buckets: those playing the long game and doing what’s right for the advertiser, even if it has some revenue consequences; and those playing the short-term game and trying to get away with shenanigans (or just not trying very hard to look for shenanigans, which amounts to the same thing).

In sum, I don’t think it’s a coincidence that the two biggest DSPs have the best anti-fraud solutions in place (Trade Desk through its partnership with Human, Google through its acquisition of Spider.io and ongoing development). Or that Trade Desk is taking share from Google as it has tightened up inventory quality.

It’s this simple (and NSFW): the advertiser is Big Worm and when he comes looking for his money…

So write some more articles and bemoan the situation and talk about vanity metrics. I’m just watching the money shift toward the companies that make advertisers more money. The rest are slowly and inexorably going up in smoke.

With love,

b