People who shop at grocery stores are met with a myriad of options—there isn’t just one choice of milk or cookies – there are numerous products in every category ranging in price, size, flavors, etc. Consumers like an array of choices, it provides more control in how much money they can spend and the exact kind of items they want to buy. But too much choice can be overwhelming and actually make it more difficult shoppers to find the best suited product—stores need to find a balance.
Stores recommend to consumers what they should buy, carrying a great deal of influence in people’s lives. With all the options, and mounting competition among brands, one has to wonder: are consumers always getting what they really want or need?
DSPs can be thought of as grocery stores in the programmatic advertising industry, and media and data providers as the food suppliers trying to secure the best shelf space. The programmatic traders buying data and media through DSPs for their agencies and advertisers, are the shoppers.
Groceries make money from in-store shoppers, as well as from suppliers trying to gain access to the store’s foot traffic, putting them in a unique position to facilitate an efficient and transparent exchange. Similarly, DSPs provide buyers with access to audiences and ad inventory, and media and data providers with a competitive outlet for selling to advertisers.
What’s important to note is different stores sell different products, and consumers typically shop at more than one store. Shops shouldn’t limit offerings to consumers, but expand them in a targeted way through different pricing structures for similar products with variety in brands—and in some cases even marketing the store’s own products for those looking to cut costs. The same applies for DSPs, as they work with numerous data and media providers to create a competitive system. Data and media providers also shouldn’t rely on one DSP, and DSPs need to consider their responsibility in providing traders with the best offerings.
The DSP’s Responsibility
Just as stores need to consider consumer-friendly product sizes when sourcing the right inventory (they’re not going to sell customers a cow, but a family size package of steak), DSPs need to be mindful of the inventory they get from media providers.
Therefore, a DSP’s main responsibility is to create a brand safe and transparent experience. Similarly, a store doesn’t place items on the shelf for $4.99 that turn out to be $19.99 at checkout. A supplier who provides the store with 1,000 boxes of cereal, isn’t told all 1,000 were sold in a week if they only sold 500. They especially shouldn’t be told the product is on the shelf if it’s just sitting in the back gathering dust.
A DSP has tremendous influence on media properties traders actually buy. In the long list of data options, the ones ranked higher are more likely to get picked for media plans. In the complex digital supply chain, advertisers should choose DSPs with access to the best inventory and the best rates, and DSPs should be transparent on performance, providing clear KPIs ad reach and results. Unfortunately, this isn’t always the case.
The Association of National Advertisers recently conducted an investigation on the lack of transparency in how ad agencies and media companies do business – including kickbacks to ad agencies based on advertisers media spend. They found issues with rebates among the advertiser-agency relationship. As opposed to the programmatic advertising process, in grocery stores there are marketing kickbacks that take place where a brand pays to have optimal in-store placement. While the capabilities are here with DSPs, it doesn’t mean they should always be implemented.
Ideally, a DSP should create an unbiased recommendation system that conveys which media and data providers a trader should pick to receive maximum performance. This way, competition among brand marketers thrives and smaller players aren’t squeezed out due to disingenuous kickbacks.
An efficient system is needed where supply and demand are brought together. Shopping for groceries is changing though as consumers find new ways to buy products delivered right to their doors. This goal of streamlining the entire process is happening in programmatic advertising too, as traders want more access to the best inventory and media providers want to reach valuable customers.
While programmatic advertising’s current system is like a grocery store, it’s moving towards a more dynamic system that combines basic store characteristics, with new trends that reshape shoppers purchase experience.