3 Trends That Illustrate an Industry on the Verge of Change

Perhaps an indication that the advertising swamp needs to drain

Recently changes, like GDPR and the rise of fake news, have made for a tumultuous, untrustworthy space that needs to change. Getty Images
Headshot of Jason Fairchild

“It’s time to grow up. It’s time for action.”

Marc Pritchard, CEO of Procter and Gamble, shared these words with digital advertisers worldwide in 2017, and the statement echoes into today’s advertising technology landscape even after GDPR has gone into effect. A year after Pritchard’s commanding words, Keith Weed of Unilever joined the drum circle, calling on advertisers and publishers to “drain the swamp” of the ad-tech industry’s worst offenders. In this post-GDPR world, new stories continue to come up almost daily on brand safety, transparency and more, the swamp has never been better primed for drainage as it is today.

While tempting to play the comment off as simply a timely one-liner, Weed’s intent was clear: It was a mandate for the digital ad industry to clean up its act if it is to continue to grow into the dominant method of consumer engagement.

The swampy players Weed and Pritchard referred to have eroded trust within digital advertising at a fundamental level. A combination of deliberate bad actions, poor business practices and an overall Wild West environment has allowed an almost “anything goes” mentality to spread—as long as baseline advertisers received a return on investment.

Nowhere has this mentality been more prevalent than in ad tech. Widespread fraud, counterfeiting of publisher inventory, unethical financial arrangements, hidden fees and rise of mediocre technology have helped the swamp overflow. Literally thousands of companies are attempting to peddle their services and take a share of the half-trillion-dollar advertising pie today.

This is the environment Unilever’s Weed sees when he looks out at the advertising landscape, and this is why so many have joined a growing chorus recognizing that, in today’s market, choosing whether or not to invest in or partner with those committed to quality is a choice every participant must make.

As the industry seeks new ways to separate legitimate tech players from the downright criminals, new market forces are evolving the landscape in 2018. Clear and reliable standards have emerged for every player—advertiser, agency, publisher, app developer and technology provider—to follow and use for identifying partners worthy of investment and trust.

Choosing whether or not to invest in or partner with those committed to quality is a choice every participant must make.

This standards-based approach to draining the swamp satisfies brands’ latest demands for greater accountability in current partners and increased guidance for selecting new ones. They also support every publisher and mobile app developers’ need for reliable and trustworthy partners in a post-GDPR world. Standards create a solid line of distinction between partners who are committed to putting long-term quality, safety and value investments above short-terms concerns and the rest of the crowd.

The proliferation of fake news has been at the forefront of news coverage, particularly in regard to Facebook and Google, but the fundamental problems surrounding quality extend far beyond the recent headlines.

Specifically, three recent trends showcase how the industry is adapting.

Global regulation

The General Data Protection Regulation (GDPR), focused on protecting the data of individual consumers, officially began on May 25 and is one of the most significant regulations to ever hit digital advertising. The key element in GDPR is that individual advertisers and publishers, regardless of their own state of compliance, are liable for their partners. Ensuring all partners build in privacy measures by design has become more important than ever.

Industry policing via ads.txt

GDPR isn’t the only standardized framework growing in significance in 2018—there’s also ads.txt. A popular self-regulatory effort introduced by the IAB Tech Lab, ads.txt is a text file that enables publishers to eliminate counterfeiting by naming authorized partners on a public record.

Publishers are sending a clear message to the industry: If a partner is not on our ads.txt list, you should not buy our inventory through them. Ads.txt has already led to widespread consolidation of buyer spend and will continue to play a critical role in cleaning up the market. Brands wishing to cut out significant fraud should only buy through ads.txt-approved partners, and publishers need to remain vigilant about adding only those sources they have deep and trusted relationships with.

Third-party verification

Ronald Reagan once famously declared that America’s nuclear policy toward Russia was to “trust but verify” that the world power was acting transparently and following through on their commitments. The same is true for advertising today where far too many actors talk the talk on quality but fail to make even the most basic investment.

Verification procedures, like certification through the Trustworthy Accountability Group (TAG), were created to fight fraud and other criminal activity in the space. Certified companies, particularly those who take the extra step of independent certification, have made longstanding commitments to quality in the industry and bear a mark of trust among publishers and advertisers. Advertisers looking to cut ad fraud by more than 80 percent can make one simple change: require that their advertising dollars only flow through TAG-certified partners.

By pulling the plug on the swampy actors that have removed value from the supply chain and by investing in fewer, more trusted partners that have made substantive commitments to quality, the entire industry will benefit from the true potential of advertising technology.

Jason Fairchild is the chief revenue officer and co-founder of OpenX.