For the past three years, the media and marketing industry has at last taken some bold and confident steps on the journey towards transparency. The increasingly complex media landscape – particularly the sometimes byzantine digital media trading ecosystem, with multiple links in the transactional chain – is now subject to more intense scrutiny than ever before.
Many voices from across the industry, including some of the world’s biggest advertisers, have urged all parties to take the direct action necessary to hit the transparency reset button. And there are encouraging signs that these calls to action and starting to translate into a more transparent media environment.
At the start of 2019, the trade body for online advertising in the UK launched a new transparency initiative. In January, the IAB UK published a set of 20 frequently asked questions (Transparency FAQs), designed to help brands improve the transparency they get from supply chain vendors such as technology platforms and sellers of inventory. As the IAB said at their launch: “the aim is to equip brands and agencies with the right questions to ask in order to help them understand more about the companies’ business models and provide an indication of their attitude towards transparency.”
Any initiative designed to improve transparency in media trading is to be welcomed, and the IAB’s Transparency FAQs are definitely another step – or set of 20 mini-steps – in the right direction. Or perhaps a right direction. For many of the questions address issues of quality of advertising inventory available to brands, brand safety, industry standards, data privacy and probity.
Where the initiative falls short, however, is what for FirmDecisions is the single most important aspect of transparency: financial transparency. As the trade body that represents vendors, platforms, online publishers, and agencies involved in the transacting of digital media inventory, it is perhaps not surprising that the IAB chose to focus on the quality rather than the transactional aspects of transparency. And yet from our perspective, we believe that brands don’t just need confidence in the quality of media inventory. They also have the right to know what the nature of each relationship in the transactional chain is, who takes what percentage of a total media buy, and what advertisers receive in return for their investment.
Without complete financial transparency, it’s impossible to understand what benefits are passed along the chain, benefits that should – by right – accrue to the advertisers who fund the entire ecosystem. Without complete financial transparency, it’s impossible to know where and how value is eroded along the transactional chain.
So we welcome the initial, if somewhat limited, scope of the IAB’s Transparency FAQs initiative. But to our way of thinking and operating, it would be a whole lot more useful to advertisers if the questions focused on transparency in the round. And that means questions designed to expose financial transparency, not simply the quality of media inventory. Until and unless it expands its scope here too, for us the 20 FAQs represent 20 small steps in one of several right directions.