How Quality Standardization Helps Build Trust on Both Sides of the Supply Chain

Post on November 18, 2019 by Eric Bozinny

Eric Bozinny
Eric Bozinny Director, Inventory Quality

With the adoption of Ads.txt (and currently, the uptick in App-Ads.txt), buyers have finally gained insight into which resellers are authorized to monetize a site or app’s inventory. Although this is a huge step towards buyers getting what they pay for, Ads/App-Ads.txt only lights up one end of the supply chain tunnel.

Without illumination throughout, you might still trip. Supply Chain Object (sChain) and sellers.json light up the rest of the proverbial supply chain darkness and enlighten buyers with full transparency into how dollars move through the ecosystem. These initiatives are defining a movement in advertising which we might call quality standardization.

Who stands to gain?

Currently, there is no way to determine who in the supply chain profits from advertising dollars or how many companies actively profit from money that flows from buyers to an ad served on an app or site.

Buyers have a right to understand who is benefiting from their media investments and sChain and sellers.json shine a light on two primary stakeholders that have historically been difficult to identify.

The first are website owners and operators. I’ve often hit dead ends trying to determine who is operating a site. “About Us” pages are generic and domain registration details are shrouded in a veil of secrecy. Having insight into who profits helps buyers make better-informed decisions about quality.

There are hundreds of sites with viral, lifestyle or other generic content where it’s nearly impossible to determine ownership. Are these owners focused on creating great content? Or are they operating rings of templated domains where traffic is primarily purchased? Without the transparency provided by the move to quality standardization it’s impossible to know.

The second are intermediaries hiding in the supply chain. While a buyer might know that inventory from a site is authorized to be sold across the PubMatic platform, there has been no way to determine what other entities have inserted themselves between the SSP and a monetizing site or app.

Creating transparency

The goal of sChain and sellers.json is simple: Extend trust and transparency across the entire supply chain from buyer to inventory source by lighting up every point where money changes hands.

Sellers.json and sChain work as a system along with Ads.txt/App-Ads.txt to reveal all sellers and intermediaries in the supply chain to buyers. Why is this important? Fraud and poor quality are inversely proportional to the level of transparency in the programmatic ecosystem. With a higher level of transparency, fraud can’t easily hide.

By having all three elements in place—Ads/App-Ads.txt, sChain and sellers.json—buyers have an unbroken chain that shows how dollars move up the supply chain. This, in turn, provides the visibility needed to best inform quality standardization decisions.

Reflecting on the moment

Here’s a simple illustration of what buyers can know with Ads.text before sChain. They could ascertain that PubMatic is authorized to resell inventory via an entity with a Seller ID of 123. In the below case, the buyer knows that there is a reseller/intermediary between PubMatic and the site, due to the Ads.txt RESELLER label. If the Ads.txt entry showed DIRECT, the buyer would understand that PubMatic is authorized to sell the inventory directly on behalf of the site.

 

Ads.text before sChain

This is in stark contrast to the more detailed information that is passed to the buyer once sChain is implemented. Using the same example, when all intermediaries add sChain into the bid stream along the path the buyer can see that there are two additional intermediaries. Depending on the value being added by the intermediaries and any quality data known about them, buyers can create more nuanced policies as to how best-allocated media dollars.

Ads.text after sChain

Buyers beware

The move towards quality standardization isn’t without its issues, however. The first is the visibility into business relationships it gives competitors. When fully implemented, Ads.txt/App-Ads.txt, sChain and sellers.json leave no place to hide. While sellers can opt to list their upstream partners as confidential, buyers will likely be more reluctant to trust any corner of the supply chain not fully illuminated.

Will the information available on the public sellers.json page lead to efforts from competitors to go after your upstream partners? Maybe. More importantly, will buyers be more likely to pick supply paths where they can see every hop from dollar to ad impression? I think so.

The second is the fear of being unfairly judged when labeled an intermediary. It’s fair for sellers to fear that buyers will try to simplify their trading by excluding all inventory where there are intermediaries identified in the supply path. In an ecosystem where all intermediaries are created equally, there might be wisdom in choosing the shortest path to the inventory.

However, not all intermediaries are created equally. Some sellers have exclusive access to sell inventory that cannot be purchased via any other path. For example, exclusive representation, geographical exclusivity or unique inventory.

They are listed as intermediaries in sChain and sellers.json because they represent a transactional hop in the supply chain. However, if buyers avoid them because they are labeled as intermediaries they might miss out on unique inventory that can meet their campaign goals.

Originally published in AdWeek