21st February 2008
NMA
Online advertising has fallen under the spotlight yet again this week after NMA found disreputable practices in the online ad exchange sector.
NMA this week reveals that music download site Songs.pk, which sits on the Yahoo!-owned Right Media Exchange, was serving multiple ad placements on its site. It was running 12 banners for brands like easyJet, Google, Orange, O2, T-Mobile and Virgin Media, sold via the Right Media Exchange.
While the majority of the ads have now been pulled, it again raises issues about online advertising. Brands, media agencies and ad networks that operate in auction-style exchanges now face increased concerns about how their inventory is being bought and sold.
Cause of caution
Ad misplacement has been one of the major issues facing the online ad industry. It came to a head last year when the BBC’s Panorama investigated the PS Fights site, and a media furore erupted after NMA reported ads for major brands like Vodafone and the COI were appearing alongside content on the BNP’s profile page on Facebook (NMA 02.08.07).
Despite brands pulling out of Facebook and moves by IASH, the IPA and IAB to restore faith in the sector, concern around online ad placements remains. As a result, brands have been very cautious about where their ads end up and have called for stronger regulation of the online ad market.
This week an O2 spokeswoman told NMA, “We have strict terms to ensure we advertise only on reputable sites. The site in question isn’t strictly against these terms, but neither are we happy being on it. We’re working to remove our advertising.”
Right Media says it’s unable to disclose which ad network served the ads due to confidentiality clauses. But it would consider dropping the network and claims to have dropped two others last year for “unscrupulous business practices”.
While Right Media claims to have technology to check ads for harmful qualities, the lack of rules and regulations means ad misplacements are possible. And the industry is already calling for regulations and guidance around using ad exchanges.
Robin Caller, founder of digital sales house Goallover, says, “The fact that 12 banner ads appear on one page shows quite clearly that certain marketplaces have no idea what they’re buying.”
Simon Mansell, MD of TBG London, adds, “This is why it makes no sense to blind buy. In the long term it’s better for brands if they know where their ads are going to be placed.”
European online ad exchange Adjug currently has advertiser and publisher terms and conditions that attempt to prevent inappropriate sites from using the exchange. However, co-founder and CEO Michael Stephanblome believes they’re not foolproof and that ad exchanges should do more to self-regulate.
“Like any marketplace, ad exchanges should make it easy to report abuse and have a clear site acceptance policy to prevent the wrong advertisers and publishers getting on exchanges,” he says. “However, this is a very young industry and it’s important that different players get together so they don’t smother the process.”
DoubleClick, which started running its own ad exchange in the US last year and has plans for a European launch later this year, believes that its top-tier advertiser relationships already weed out any bad sites from the exchange.
“We only do business with higher-level buyers and sellers,” says Scott Spencer, VP of product and strategy at DoubleClick. “Any advertiser or publisher using the exchange has to have a contract with us, and we generally only allow companies on there that we normally do business with.”
Regulating exchanges
DoubleClick has also joined the MRC and IAB alliance in the US, a joint auditing body that was set up last year to monitor ad exchange practices. As exchanges are still in their infancy in the UK, there’s nothing similar here yet, but Spencer thinks it won’t take long.
“We’re trying to put as many controls in place as possible to protect buyers and sellers,” he says. “We’re talking to all the regional standards bodies in Europe, the AGOF in Germany and IASH in the UK.”
Khalil Ibrahimi, chairman of IASH, admits policing the problem of multiple ads served by ad networks in exchanges could fall under its remit. “It’s something we’re interested in exploring,” he says.
Guy Phillipson, CEO of the IAB, of which IASH is a council, adds, “It’s still early days for ad exchanges, as it is with the long tail of the internet. We can’t police everything. However, when these situations come to light it’s worth looking at them. I’d be very interested in talking to Right Media.”
John Cole, UK MD of Adknowledge, who used ad exchanges when he ran online ad network Media Run, believes the only safe way for advertisers to use exchanges is if they’re open. “I’d like to see a completely open ad exchange. Until there are tweaks to the model, it’s not going to work for brand buys,” he says.
“When you get the possibility of sites on the periphery of good taste putting themselves forward as entertainment, then there’s a high risk of ad misplacement,” Cole adds. “You really don’t know where your inventory is going.”
Online ad exchanges: the facts
· Online ad exchanges are auction-style marketplaces where publishers and networks can sell their inventory to the highest bidder.
· Scott Spencer, DoubleClick’s VP of product and strategy, likens buying on an ad exchange to buying airline seats. “People can bid for a seat that hasn’t been sold up to the last minute before the plane takes off, and they can outbid each other on a particular seat so the airline (or media owner) gets the maximum amount for each seat (or ad sold).”
· Although relatively new to the UK, Right Media is by far the largest ad exchange, although Adjug is building an impressive UK audience.
· The DoubleClick ad exchange and US exchange AdECN, recently bought by Microsoft, are planning to launch in the UK in 2008.
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