The Different Elements to Inventory Quality: Q&A with PubMatic

by Lindsay Rowntree on 16th Oct 2018 in News

In association with PubMatic

Following the release of PubMatic’s report, ‘Understanding Inventory Quality: Thinking Beyond Bots’, ExchangeWire speaks with Eric Bozinny (pictured below), director, inventory quality, PubMatic, about the company's efforts to improve quality within the programmatic landscape. Bozinny explains the different elements of inventory quality, and why it’s more than just fraud.

ExchangeWire: What do we mean by 'inventory quality'?

Eric Bozinny: Historically, the concept of inventory quality has been closely associated with ad fraud. The rise of third-party fraud-detection companies reinforced that thought, as they focused on identifying bots and nonhuman traffic. I take a more holistic view, that obviously includes ad fraud, but also encompasses the content against which the inventory is served, as well as the quality of the audience this content attracts. Sites and apps that demonstrate high rates of user interaction and loyalty provide a better environment for advertisers than those where an audience is shipped into the site simply to consume ads.

Eric Bozinny, Director, Inventory Quality, PubMatic

How does the definition of inventory quality differ from how buyers and sellers perceive it?

Four years ago, the ‘fraud tech’ industry (third-party fraud-detection vendors) was just getting started. Today, it’s considered table stakes and is viewed as a best practice to mitigate fraud by both buyers and sellers alike. It’s almost viewed as an insurance policy, from the buyer’s perspective, allowing them wiggle room to explain performance gaps in campaigns. However, having been working on this for 10 years, I’ve learned that the focus for fighting fraud lies in identifying the bad actors further upstream that cause these quality issues in the first place. Relying on fraud detection alone becomes a game of ‘whack-a-mole’, a constant struggle to stay ahead of bad actors. It’s the worst place to fight inventory quality issues. Fraud tech is good, but it’s not the end all. Buyers and sellers should use it as a signal, a guide post to look for the root cause of the problems, which often occur where the money changes hands.

Where does the responsibility lie to foster and promote inventory quality?

The industry narrative is that the supply side is responsible for quality, because that’s where the content is and where the ads are served. But I think it goes both ways. On the buy side, the advertisers need to demand improved quality. Buyers and agencies need to: learn more about how ad fraud and invalid traffic affect their campaigns; demand more transparency in the data they receive; and understand where every ad is being served. Then they can force the supply side to make changes.

It’s a virtuous cycle and everything improves if everyone is paying attention. The supply side can pull the levers, but the demand side needs to mandate change. We are beginning to see this with ads.txt, as many buyers are now requiring that the supply path be validated before they purchase inventory via programmatic auctions.

Is ads.txt the silver bullet it has been hailed to be?

While ads.txt has solved loads of issues, including placing domain spoofing on a path to extinction, it is not perfect. Bad actors can focus 100% of their time and resources on gaming the system. They dream up new schemes to rob the ecosystem of media dollars and then evolve and perfect these deceptive practices to maximise their ill-gotten gains.

Just the other week, I overheard that an agency asked to add themselves as an entry in ads.txt, as it would help with their reporting. I was shocked by the question. ads.txt is designed specifically for sellers. Early on, you had arbitragers claiming to be sellers, that were demanding to be added to ads.txt files, capitalising on a lack of understanding of the specification. The problem here is, once your name is added to that file, you have carte blanche to essentially do whatever you want. Since ads.txt still can be manipulated, it takes education and appropriate focus from buyers and sellers for it to work properly.

Looking ahead, ads.cert will be a great solution. But, as history has shown, bad actors may very well find some vulnerability that hasn’t been considered. The biggest challenge with ads.cert is that it’s only compatible with RTB 3.0, which will impact how quickly it can be adopted at scale. Another challenge is the lack of an ads.txt solution for in-app inventory. Efforts are being made to gain the co-operation of Apple and Google (since the vast majority of apps are downloaded through their iTunes and Google Play stores) to facilitate a solution.

Brands are wary about the quality of in-app inventory and they appear to believe the space to be very fraudulent – is this the case?

If there’s anything that keeps me up at night in the realm of inventory quality, it’s in-app fraud. It’s such a blackhole at this point.

The problem is that developers need to implement SDKs to provide a full telemetry of all signals coming out of an app. Every measurement vendor has their own SDK (if they have one at all) and developers are wary about slowing down the user experience by layering multiple SDKs on top of each other. Fortunately, the IAB Tech Lab is working on the Open Measurement Initiative. It will release the Open Measurement Software Development Kit (OM-SDK), which is a single SDK that all third-party measurement providers have agreed to use; and if app developers incorporate that, it will open up the telemetry and give buyers more confidence about what is going on inside that app from a quality perspective.

What can buyers and sellers do to protect themselves, and improve inventory quality?

For buyers, the most important thing is to know where their ads are serving. While true for all advertisers, it’s especially important for brand advertisers where campaign success metrics are much softer. They need to demand more data transparency and they also need to recognise the importance of content and audience and ensure the context around which their ad is served provides value for their branding campaign KPIs.

For sellers, the most important thing is to develop inventory quality processes and policies, and then provide transparency about how they manage their inventory quality. I was dealing with one supplier recently, where we noticed a large spike in invalid traffic that completely dissipated the next day. I asked the account team to make inquiries with the supplier, without passing along the specifics I already knew to be true. Why? I wanted to discover if the supplier was monitoring quality closely. When asked by the account team, the supplier confirmed they’d seen a single URL driving up fraud so they removed it that same day. To me, that publisher is golden because they were transparent and on top of things, and that builds trust.

Should buyers, sellers, and tech companies collaborate to improve quality industry-wide?

Sometimes in my job I like to think of myself as a spy behind enemy lines. I have relationships with other SSPs and DSPs; and if I see something that I think might be fraudulent, I’ll call them and ask if they’ve seen it – we can help each other. I strongly believe we should work together as much as possible.

Quality should only be a competitive advantage in the very short term, until a point where you can share your ideas with everyone else in the supply chain, as that rising tide will help strengthen the entire industry. If each player keeps data and investigations around quality proprietary, confidence in digital will erode over time, which helps none of us.

What do you see as the future state of inventory quality?

Whenever the next pullback in the economy happens, I expect to see a big shift to quality. I also anticipate a global spread of the GDPR-type regulations and have observed glimpses of the precursor discussions occurring here in the U.S. Within these new regulations, quality becomes so much more important, as advertisers can’t target their audience with the same level of accuracy they could before. Moreover, content becomes king again, so buyers will want to ensure they are appearing within quality contexts.

You can download the full report here.