Compliance and transparency in AdTech is a topic that ushers hot debate within the industry. It’s a complicated topic to approach due to its intricate nature. Numerous players along the supply chain perform specific roles and have fees for completing those roles. However, advertisers also have the right to know where their ad spend goes. Bringing these two ideologies together is proving to be a great challenge.
Join us as we explore why transparency is so important and which challenges must be overcome. We also look at potential solutions, such as proxy servers, blockchain technology, and more, to help improve trust in AdTech and avoid ad fraud.
Why is Transparency in AdTech Important?
The lack of transparency in the digital marketing ecosystem is a major challenge to AdTech. Within this industry, transparency refers to understanding how ads are created, distributed, and monetized and how data is collected, stored, and used.
Transparency is vital to help advertisers optimize their marketing campaigns and ad budgets. It’s also essential to help advertisers protect their brand, reputation, and revenue. However, transparency isn’t only important for businesses. It also plays an important role for consumers and even industry regulators.
For consumers, transparency helps them to control their privacy and preferences. This will become increasingly important as stricter privacy regulations such as GDPR become mainstream. In addition to consumers, better transparency within AdTech will help regulators enforce compliance and accountability within the sector.
Trust Challenges in AdTech
The transparency issue isn’t a new one when it comes to AdTech. This problem has been brewing over the last few years. As such, we already have a good idea of the problem. Some main issues concerning ad agencies are inventory quality and clarity of inventory sources.
Breaking down these issues, we end up with two main parts that contribute largely to the distrust in the digital advertising industry. First is the lack of clarity on fees, charges, and markups from vendors and intermediaries. Why are you paying what you’re paying? Are there hidden fees? Is there a guarantee that you’ll get value for your investment? In most cases, advertisers are paying more than the true cost of media to cover fees from vendors and intermediaries.
The second contributor to the transparency issue is ad fraud and viewability. Ad fraud is a growing concern for advertisers as more individuals fall victim to these fraudsters. Without transparency on where the money ends up, it makes it easier for ad fraudsters to enter the market. This problem needs to be addressed by all players within the ecosystem, not just advertisers or media agencies.
To streamline this process, advertisers need more transparency on their viewability. This includes knowing how many times real users saw their ads. Fraudulent media buys can only be detected, tracked, and reported on by creating more transparency around these issues. Advertisers will also be able to see what percentage of their ad spend went towards fraudulent activities and stop paying out money to these bad actors.
Potential Solutions to Improve AdTech Transparency
Now that we understand why transparency is such an issue within the AdTech industry let’s consider a few potential solutions.
Blockchain Technology
Blockchain is widely associated with cryptocurrency and provides a transparent and secure way to transfer assets. This means there can be useful applications for blockchain in AdTech. Especially when it comes to transferring funds transparently and fighting ad fraud.
While this may seem like a great solution, there are still a few hurdles that need to be navigated before it can be adopted on a large scale. The biggest issue with incorporating blockchain into AdTech for better transparency is that it’s too slow. A transaction can take anywhere between 10 – 30 seconds to be validated and added to the public ledger. Traditional transactions take a few milliseconds, which makes blockchain too slow to meet the demands of a real-time market.
Proxy Servers
Proxy servers are one of the most efficient ways to verify your ads and ensure you’re not a victim of ad fraud. With the rising statistics of ad fraud, this process is more important than ever. By using the IP provided by the proxy, you can easily view your ads the way a real individual would. This ensures your ads look and act the way they’re supposed to.
In addition, proxy servers can also empower any additional ad verification and anti-fraud tools you may use. These tools can be detected and blocked by sites, which can halter ad verification and even hide ad fraud. However, assigning an IP from the proxy server to your other tools will make them more difficult to detect and block.
Better Regulated Industry Standards
Improving, adhering to, and enforcing industry standards and best practices is another potential solution to the growing mistrust in the AdTech sector. By creating industry standards, a framework is created that defines the technical and operational aspects of AdTech. This creates consistency, interoperability, and efficiency across the ecosystem. It also supports better communication and collaboration among stakeholders.
Having clearly defined industry standards also make it easier to adhere to compliance regulations. Compliance to industry regulations is essential, but can be difficult to manage. However, if these regulations are considered when creating industry standards, businesses will find it easier to adhere to them.
Improve Compliance and Transparency in AdTech
At the end of the day, transparency in business is vital. It’s only through transparency and authenticity that trust can follow. Without trust, there can be no business. As such, it’s vital that advertisers and media agencies do everything in their power to be as transparent as possible when it comes to digital advertising campaigns. Following industry regulations and best practices is a good place to start. In addition, leveraging blockchain technology and proxy servers can help boost transparency and trust while protecting your ads from ad fraud.
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