From haggling to harmony: We need a new framework to find the collective win on the open web

More than any time in recent memory, it feels like we’re at a pivotal moment in the world of programmatic advertising and the open web. While this moment feels heavy in many ways, the good news is that we can hit the reset button on things that have been plaguing our space for a long time. This is a chance to find the collective win, and it starts by letting go of the frameworks of the past. Getting there starts by creating:

• An open dialogue between the buy and sell sides
• An open programmatic marketplace where buyers know what they’re buying
• Explicit incentives to create quality products
• An elevated user experience and a clear value exchange

But before we explore that path forward, it’s important to understand the context of how we got here. Let’s rewind about a dozen years.

I have a vivid memory of being in a client meeting, listening to a presentation from the head of display media at the agency I worked for at the time. He was talking about new data partners that would allow real-time bidding on audiences as specific as "people who drive Honda Civics that are more than five years old." I was a performance digital marketer focused mostly on search engine marketing at the time, and this was a revelation to me. Programmatic (often referred to in those days as real-time bidding) was a relatively new concept, and the idea of being able to align intent similar to a search campaign seemed like a really big deal. What I failed to appreciate at the time was that this moment represented a larger change in the way digital advertising is transacted. It seems much of the industry failed to appreciate that fact as well.

In the pre-digital era, pretty much all media was transacted on a scarcity model. There were only so many TV stations, newspapers, radio stations and magazines. That set the negotiating power of suppliers pretty high, as demand regularly outstripped supply and alternatives were hard to find. The rates were what they were, and that made negotiation skills a top priority for the buy side. If you could get a bunch of added value or negotiate a lower rate, you were an in-demand buyer. Collectively, the value that buy-side players like big agencies brought to the table was their position to wield buying power in service of negotiation. In other words, the value of the buyer is to drive down prices. This dynamic lasted for decades until digital came along.

The change was slow at first with direct site buys and ad networks, but programmatic was a game changer. Negotiating power shifted fast from the sell side to the buy side. We now had ready access to world-class advertising technology, and we could point it at driving down the rates that had so long been dictated to us. The cost of online display ads dropped through the floor, addressable audience data was elevated and inventory was commoditized. We just wanted the right audience. Who cares about the content, right?

Like so many big industry changes, the pendulum swung from too far in one direction to too far in the other. Publishers got squeezed. Low-quality inventory flooded the market to the point that the Association of National Advertisers reported last year that low quality websites known as made-for-advertising sites were chewing up nearly 1 in 5 ad impressions in programmatic. Not surprisingly, this has led to consumer disillusionment, as they get blasted with impressions and are doggedly retargeted across a labyrinth of digital nonsense. That disillusionment has raised concerns about consumer privacy and is leading us to say a protracted goodbye to the third-party cookie — the instrument that made so much of this audience tracking and targeting possible in the first place.

So here we are. We’ve traversed the extremes of a scarcity model and an overly commoditized supply market. The framework for how digital media has been transacted is focused on tech-fueled negotiation — value capture rather than value creation. You hear people say all the time that someone else’s margin is their opportunity. It’s hardly surprising that the industry is struggling to come together to find solutions to the existential problems facing programmatic advertising. It’s not reasonable to expect two parties to work together when they’ve spent so much time fighting over the same piece of the pie. We need a new framework.

The supply side needs a marketplace of willing buyers to effectively monetize content. Consumers need an experience they can tolerate and a value exchange they can understand. At the risk of sounding a bit kumbaya about all of this, we must work together to find the collective win. The alternative is to close up shop on the open web and cede all of that territory to paywalls and walled gardens.

That all sounds nice, but what does it look like in practice? There are some things we can do right away to find a new path.

The first step is for the buy and sell sides to simply start talking again. Some of the most energizing conversations I’ve had in the last year have been with supply-side platforms (SSPs) and publishers. We have so much to offer one another if we don’t let the interaction start and stop with rates. If we can agree that we’re coming to the table to create value rather than fight over it, these relationships have the potential to be so fruitful. While the first step may be coming together, there are some key things that each side must confront as well.

On the buy side, we have to break our addiction to what the industry has started to call “cheap reach.” We know that all impressions are not created equal, and therefore can never be a commodity. If all we’re doing with ad tech is weaponizing it to drive down prices, we know that quality will deteriorate. Instead, we need to use technology to create better-quality signals. This includes things like the move from viewability to attention metrics, robust content filtering for quality, and an ongoing commitment to move closer to what we’re buying instead of using technology to create a larger divide.

On the sell side, progress looks like a willingness to address the ongoing information asymmetry in the programmatic supply chain. If buyers are going to focus on quality as opposed to just cost (something that would come with tremendous benefits for publishers and the sell side overall), we need signals that help us determine what quality looks like. In other words, we need to better understand what we’re buying. Ideally, this would come with more signals being passed along and injected into the bidstream. At the very least, it has to include full transparency into supply through log-level data from SSPs. If both sides bring these things to the table in our open discussions, we can build trust and get to work on long-term fixes.

There’s a framed quote on my office wall of the old proverb 'If you want to go fast, go alone. If you want to go far, go together.' It’s a constant reminder to me that some of the most fulfilling moments in my career have come as the result of partnerships. It may sound a bit trite, but that really is the new framework we need in our industry as we move from added value to co-created value. We have so many tools at our disposal. Instead of using them to further divide the buy and sell sides, let’s point them at solving the challenges we face in our industry, together. That’s how we can find the collective win.

This op-ed represents the views and opinions of the author and not of The Current, a division of The Trade Desk, or The Trade Desk. The appearance of the op-ed on The Current does not constitute an endorsement by The Current or The Trade Desk.