Shawn Lim
Jun 4, 2024

Can curation revive the programmatic open auction?

Campaign explores the value of the open auction for publishers, and whether the risk of vulnerability can be subsided with curation.

Can curation revive the programmatic open auction?

Navigating the open Internet is becoming increasingly challenging for brands as traditional targeting methods dwindle and spending on less-effective Made-for-Advertising (MFA) sites increases.

There are also concerns about the ‘murkiness’ of the open auction, focusing on problems such as lack of control, exposure to unsafe publishers, and low media-quality inventory. Open auctions are the most common type of real-time bidding in programmatic advertising. They allow numerous demand-side platforms to simultaneously bid on inventory through supply-side platforms (SSPs).

This competitive environment aims to maximise revenue for publishers by setting a minimum floor price for every thousand ad impressions (CPM). The advertiser offering the highest bid wins the ad space, ensuring publishers achieve the best possible market price for their ad inventory. 

In 2022, DSPs like The Trade Desk announced it would stop buying ads through Google's Open Bidding auction to ‘remove inefficiencies’ and provide advertisers with ‘transparent and objective access to premium inventory. However, there could still be space for the open auction in digital advertising as its evolution is influenced by technologies like curation, which refine how media buys are conducted on the open internet.

Despite concerns about the open auction's transparency and efficiency, advanced programmatic technology and AI can enhance the quality and relevance of ad placements. 

Curation enables the aggregation of quality inventory into Private Marketplace (PMP) deals, balancing the ecosystem between direct buys and the dynamic open auction environment. This allows for targeting specific, engaged audiences across diverse content verticals, supporting independent media and high-quality journalism while remaining cost-effective and privacy conscious. 

With the right partners and technology, the open auction continues to reveal the hidden value publishers can unlock from curated inventory while remaining relevant and privacy-safe. 

How curation addresses high CPMs in open auctions

Modern curation technology combines the best of both worlds—the scale, cost-efficiency, and transparency of an open auction with the high-quality, brand-safe private marketplace.  

Curation technology empowers advertisers, placing them in the driver’s seat. It offers enhanced control over inventory-sourcing and the ability to build creative strategies and audiences at scale, all tailored to their unique business goals. This is achieved within privacy-first, brand-safe environments, ensuring high customisation and control.  

Wei Hsueh, country manager for Asia Pacific at Equativ, explains to Campaign that through a robust toolkit, buyers can build custom PMPs by combining data, formats, and measurements with handpicked supply from multiple publishers into a single deal ID, facilitating more efficient audience targeting at scale.  

“With direct access to publisher supply, buyers can bypass intermediaries, ensuring a more streamlined distribution of resources and ad spend,” explains Hsueh. 

Nishanth Raju, managing director for APAC at Lotame, says that curation technology is paving the way for dynamic, multi-publisher deal creation. Traditionally, PMPs were static at a set CPM and often greater than that of the open marketplace.  

Raju explains to Campaign that curated deals give advertisers the means of accessing a dynamic audience with more inventory transparency and control. For example, reducing resold inventory and MFA and flexibility with regards to cookieless targeting.  

“Curated deals deliver scale, incremental reach and optimised supply paths to advertisers at the right price while meeting or exceeding KPI benchmarks observed at open auctions. Cost becomes a factor of optimisation within curated deals as opposed to a compromise on scale or quality,” explains Raju.  

James Leaver, chief executive and co-founder of Multilocal, points out the open marketplace has a lower cost than PMPs.  

Leaver explains curation helps address concerns over media quality by providing access to supply that the demand side can feel confident about buying.  

“It focuses on audiences and inventory from the right places to meet each campaign brief in a scalable, brand-safe way. It offers complete transparency on what you are buying, how you buy it (the supply path), media quality, and audience efficacy,” says Leaver. 

“PMPs involve a single-publisher deal, whereas curation is designed for multi-publisher or audience-focused deals.” 

Does curation make open auctions more appealing?

Fragmented supply chains, hidden fees, and the rapidly evolving identity landscape pose challenges for buyers in navigating the programmatic supply chain and achieving ROI for their clients.  

These challenges have prompted a shift towards more controlled media buying, transitioning from open auctions to PMPs, and, recently, towards curation. While one-on-one PMPs offer buyers increased transparency and access to premium inventory and customised audiences, they prove difficult to scale.  

“Curation presents a straightforward solution to streamline the complexity of the programmatic supply chain, facilitating direct, transparent, and efficient transactions between buyers and sellers with substantial reach,” explains Hsueh. 

“With a self-service curation platform, buyers can build unique data-enriched PMPs spanning multiple publishers under a single ID, helping to enhance reach, delivery, and performance while maximising operational efficiency.” 

Agreeing with Hsueh, Leaver says applying data on the supply side drives better performance, improving results for buyers, who are easily able to find the audiences they need for each brief across a universe of supply. 

“Curation surfaces the right opportunities into the DSP environment, which advertisers can then choose to buy. It provides both transparency and control of media environments,” explains Leaver. 

With a shift toward CTV (AVOD) in recent years and an emphasis on supply path optimisation (SPO), buyer workflows have embraced the Deal ID construct more holistically, explains Raju. 

Deal ID is a unique identifier between a SSP and DSP that facilitates transactional clarity and specificity within the programmatic advertising ecosystem. 

“We are now seeing strategic shifts within online video and display, translating into higher spending on dynamic PMPs or auction packages, giving advertisers greater control, addressability and transparency compared to traditional open market inventory, and at a lower carbon cost,” says Raju. 

How is AI transforming the open auction model?

AI-powered technology plays a pivotal role in traffic shaping mechanisms that optimise traffic sent to DSPs through real-time analysis of buyer behaviour patterns. This ensures the delivery of the most relevant and high-quality traffic that buyers expect.  

Additionally, AI is utilised in performance algorithms to forecast ad viewability and video completion rates, dynamically modify bid strategies and targeting parameters, and guarantee alignment with KPIs such as viewability and video-completion rates.  

“Companies can leverage AI to optimise media planning processes by examining historical data and client preferences to determine the appropriate targeting parameters, channels, media mix, and budget allocations necessary to achieve campaign objectives,” explains Hsueh. 

AI-driven predictive analytics and machine learning can also analyse vast volumes of data to predict user behaviour and identify patterns indicative of high-quality traffic.  

Similarly, fraud detection and prevention technologies employ AI-powered algorithms to detect bot traffic, click fraud, domain spoofing and filter out such traffic in real-time. 

Detecting bad actors ensures budgets are spent on real campaign interaction and real users. In addition, AI is already influencing the categorisation of open web inventory, enhancing how audiences can be found through contextual and semantic signals.  

“Coupled with ML and custom algorithms, there is a real opportunity for advertisers to bypass tech limitations and customise their programmatic strategy with ease and minimal cost,” explains Raju. 

“Curated deals built on contextually relevant, high attention, low carbon inventory with AI-informed, dynamic bid selection trained on individual brand KPIs is just the beginning.” 

Filippo Gramigna, chief operating officer of Onetag, points out the best AI-powered programmatic technology knows how to remove all the programmatic wastage at source and curate the media quality and outcomes partners need.  

“This technology can learn from all impressions at the placement level to deliver high-quality curated bidstreams, providing DSPs with the proper support they need to realise the potential value of PMPs and the open auction,” explains Gramigna. 

Can curation solve concerns about open auctions?

In recent years, the open auction, combined with exclusion or inclusion lists and prebid filters, has demonstrated its effectiveness, especially for ‘bottom of the funnel’ campaigns. However, this targeting approach has its constraints. The rise of MFA sites complicates updating exclusion lists, prompting the industry to seek alternatives. 

Digital media agencies like Jellyfish are actively engaged in enhancing the transparency of the supply chain to address this challenge.  

Philippe Imbert, senior media and partnerships manager, Jellyfish tells Campaign the agency is collaborating with external partners as the industry evolves to introduce new KPIs such as attention measurement and MFA detection.  

“These advancements will aid in pinpointing the most suitable inventories for our clients' campaigns,” says Imbert. 

Hsueh suggests that the most effective strategy is to use a curation platform to employ a more focused and centralised supply strategy by building strategic marketplaces with preferred publisher partners. This will enhance transparency in managing the media buyer’s supply chain. 

He explains that doing so will enable media buyers to control investments into specific publishers and secure the most direct path to your desired supply, simplifying the tracking and reconciliation of spending agreements. 

“In addition, you can implement business rules and performance thresholds such as brand safety, viewability, and eCPMs, which can be uniformly applied across media buying operations,” says Hsueh.

Raju notes a range of levers can be pulled to increase effectiveness and mitigate risk. 

“For example, some strategies may deploy fraud detection and brand safety technologies, blacklisting and whitelisting to pre-approve sites and domains, and working closely with SSP partners on detailed reporting on viewability, placement, and attention to keep assessing the quality of the inventory,” Raju explains.

The road ahead for curation and AI in open action

Third-party cookies have been the backbone of digital advertising, enabling key functions like targeting, frequency capping, measurement, ad personalisation, and scale.  

With the loss of this signal, buyers will need to leverage multiple privacy-first data and identity solutions to replicate the full functionality of cookies. AI-powered curation can ensure that relevant and high-quality content is delivered to the right audiences, thus enriching their online experience and interaction.  

This approach ensures that ads are positioned within contexts that resonate with their interests and inclinations. AI facilitates ad personalisation while upholding user data, as it can analyse user behaviour and preferences without accessing personal information.  

“Curation technology offers expanded privacy-first and identity solutions, making it easier for buyers to employ a multi-pronged approach to navigate the post-cookie era—delivering advertising use cases like data onboarding and frequency capping using alternative IDs across any DSP,” explains Hsueh. 

Curation and AI will also continue to help bridge the gap between the cost-efficiency of open auctions and the quality assurance of PMPs.  

Together, they provide advertisers with tools and insights to access premium inventory at competitive prices while ensuring brand safety and media quality outside the walled gardens.  

“Curation creates a viable and strategic audience network outside the walled gardens. As these technologies evolve in the coming months, we can expect significant improvements in cost-effectiveness and quality assurance across programmatic advertising on the open Internet,” says Raju. 

Gramigna notes supply-side curation, primarily when powered by AI-programmatic technology, is critical in ensuring that the open Internet, which relies on advertising, can prosper. He explains that curation technology knows how to reach valuable audiences and high-quality impressions across the open internet, increasing marketers' exposure to valuable users who may otherwise be missed.  

For example, the world of specialist sites and experiences increases the potential for more relevant connections, especially using the latest contextual targeting technology.  

Using this approach, brands can improve their affinity with audiences and, as a by-product, help sustain independent journalism amid the rise of walled gardens and less trusted content.  

“Curation platforms provide a futureproof cookieless solution, working with universal IDs and first-party data providers to achieve better user matching and faster outcomes directly on the supply source,” explains Gramigna. 

"Advanced contextual technology also allows hyper-targeting for brands alongside relevant content. As privacy regulations develop, cookieless curation will remain privacy-centric and data-compliant.” 

Source:
Campaign Asia

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