Will new compensation models improve Ad Quality?
The jury is out on whether ads.txt will become the bedrock of digital ad fraud mitigation or simply a first positive step along the way. But a separate industry trend is gaining momentum — and it could aid in the fight against fraud.
It is the shift from the traditional percentage-of-paid media compensation system to an array of outcome-based models that could create the unintended benefit of helping to neutralize the menace of fraud.
Yes, the industry’s traditional percentage-of-paid media compensation system has been creating a not-insignificant disincentive to embrace solutions like ads.txt. It perpetuates the incentive to risk advertiser fraud exposure in order to deliver pre-set advertiser impression counts.
Relaxation of Standards
While ads.txt is now required by most of the best-in-class demand-side platforms, when they are under pressure to meet a client-mandated campaign threshold, might some DSPs be tempted to relax their standards and purchase non-compliant inventory?
In so doing, they would be able to fully deliver those campaigns to keep clients happy and maximize their own revenue.
The pressures of a transaction-based business model and the perverse disincentivization it can create do not serve brand marketers well. Agencies, which have operated the longest under the transaction-based model, are increasingly reckoning with the diminishing returns the system perpetuates.
This dynamic is not unique to the demand-side of the current programmatic marketplace, as this incentive exists similarly for publisher-side networks that expand their site lists to ensure meeting delivery goals. It can even apply to premium publishers that buy traffic to meet delivery goals for their direct sold campaigns.
The drumbeat for outcome-based compensation models has been getting louder in recent years. Brands are slowly beginning to realize the implications and the entire industry is beginning to amp up the push toward outcome-based compensation as the superior model.
If brands, publishers, agencies and tech partners cohesively band together to preach this new gospel, the impact it will make will be transformative. A not-inconsequential side benefit of new compensation, based on outcomes, will be the cleansing impact on what ails our ecosystem, including ad fraud.
It will re-balance incentives where anti-fraud tech solutions like ads.txt will be fully embraced and prioritized because there will no longer be pressure to make the margin calls of a campaign on the brink of under-delivery.
So much of our industry has been slow to truly understand the consequences associated with delivery at all costs.
What’s Around The Corner
Ads.cert, the next iteration of ads.txt, is being regarded as the next-level solution that could also clean up the ecosystem, particularly the in-app universe. Ads.cert validates the data that is exchanged between buyers and sellers at every step of the digital ad transaction chain.
This adds a layer of assurance that the information is not being gamed, which you can’t necessarily account for in ads.txt.
The general consensus is the tool won’t see wide industry rollout and adoption for at least another year. That said, ads.txt along with app-ads.txt — newly ready for adoption, the imperfections notwithstanding — are valid starts in fighting desktop and mobile in-app spoofing.
Instead of bemoaning the lack of a silver bullet, we should collectively as an industry be more proactive and more disciplined in our commitment to maximize the utility of the tool. At the same time, we can continue the broader conversation around revitalizing antiquated compensation models.
This article was originally published on MediaPost