The Guardian talks with European publishers about ad fraud issues
UK newspaper The Guardian and European publishers Schibsted and Axel Springer have been discussing how to address issues of tech fraud and excessive fees in the programmatic ad industry, according to Danny Spears, programmatic director at The Guardian. Speaking at Digiday’s Publishing Summit Europe in Berlin, Spears said the three firms want to "redefine digital advertising", and that using secondary markets was a "Russian-roulette approach to media buying". The UK publisher has increased pricing rules and standardised tech contracts since the 2016 discovery that it received just 30p for every pound spent on programmatic advertising.
The Guardian is in talks with European media owners Axel Springer and Schibsted over how to throttle ad fraud and other opaque practices occurring in the programmatic advertising supply chain.

Speaking at Digiday’s Publishing Summit Europe in Berlin this week, Danny Spears, programmatic director at the Guardian, appealed to publishers to challenge the status quo in which buyers invest in high volumes of cheap inventory through secondary markets like ad exchanges. The “audience-buying narrative” results in advertisers and publishers becoming exposed to unknown tech fees and ad fraud.

Over the last six months, the Guardian has discussed with Axel Springer and Schibsted how to address these issues. Spears stressed that the aim is not to form any kind of official publisher consortium but to discuss together what meaningful action can be taken to ensure everyone in the digital ad supply ecosystem is accountable for the role they play.

“Our shared vision is to redefine digital advertising, to catalyze its evolution from a fractured, opaque and inefficient marketplace to a competitive ecosystem that delivers unparalleled value to advertisers and publishers alike,” Spears added.

The Guardian has staked out a vocal and assertive position on the side of premium publishers fighting back against what it sees as unfair treatment in programmatic. In 2016, the publisher ran an investigation on its own inventory and found it only received 30 pence for every pound an advertiser spent with it programmatically. Data merchants were siphoning off the rest. In March, that culminated in the Guardian suing former vendor partner Rubicon Project for allegedly not disclosing its fees — an ongoing lawsuit.

“Buying from a secondary market is high-risk and a Russian-roulette approach to media buying,” said Spears. In short, he said, programmatic advertising has spawned “the art of buying crap,” which has shown up in the array of brand misplacement disasters over the last year, including advertisers like BMW appearing on so-called hate-speech sites like Breitbart and others finding their ads next to extremist content on YouTube.

“Today, ad tech wants to control our ad stack, while competing for our customers’ ad spend,” he said. “In short, publishers are being eaten alive from the inside out. Our belief is media sales is our prerogative, and technology should be a mere enabler. Publishers need to restore control of their supply chain and ensure sovereignty over their revenue decisioning.”

The Guardian has been working with its customers to pull its transaction data and map its shared supply chain. That’s helped it overcome some of the market opacity, identify unnecessary costs and friction in the supply chain and allowed it to introduce more pricing rules to create tax-efficient routes for buyers. This has increased its customers’ working media by 30 percent, according to Spears.

The Guardian has also developed a standardized approach to its ad tech contracts that lays out all its terms of engagement for vendors, leading to increased transparency and stronger partnerships. That in turn has converted directly to higher yields and media revenue, unlocking 10 percent incremental net programmatic revenue over the past 10 months, Spears said.

“Despite fraud being derided, we’re yet to hear any real cries of zero tolerance from the middle of the market — I suspect because that will cost volume and margin. But we need to be clear with partners on zero tolerance to fraud. Publishers need change, and so do advertisers,” said Spears. “Publishers must collaborate to build a vision that we are proud to be a part of. That’s where programmatic can finally deliver on its promise.”