Why transparency is vital for brands and the advertising industry

‘Transparency’ must be one of the most-used words in the digital advertising industry this year.

A combination of high-profile news reports and landmark regulation changes means brands are insisting on more visibility over where ads are placed, advertisers are demanding greater clarity on where budgets are spent, and consumers are seeking assurances in how their data is used.

So why is transparency so important, and what action can be taken by the advertising industry to ensure it is given the necessary precedence?

The need for a clearer picture

Maintaining a positive image is essential for brands, as it encourages consumers to associate themselves with a company, develop long-term loyalty, and make purchases. Ensuring ads are placed alongside reputable and credible content is a key factor in guaranteeing a favourable consumer viewpoint, so brands need complete clarity into where their ads are being served. A huge three-quarters of Brits avoid buying from a brand whose ads they see next to inappropriate material, and a CMO Council study revealed 78% of brands believe associations with inappropriate content have negatively impacted their image. Lack of transparency into ad placement also enables ad fraud to flourish; with estimates suggesting the cost to brands will average £36.5 million every day in 2018.

The continuing growth of programmatic has been blamed for contributing to a lack of transparency, with complex media supply chains making it difficult for brands to see where budgets are spent. The programmatic ‘black box’ prevents true visibility of where ads are served, and almost 80% of advertisers who purchase through programmatic are concerned about this lack of clarity – making it all the more vital that brands understand the supply chain and choose partners they can trust.

Another barrier to transparency arises as advertisers partner with media agencies to execute campaigns. Brands are frustrated by the lack of information regarding both where their budget is spent, and post-campaign data and feedback. A lack of faith and communication between the two parties is exacerbating the problem, with 36% of programmatic ad buyers reporting low levels of trust in their media agencies.  As a result, 35% of brands are already taking their media buying in-house, and more are looking to do so.

The big data clean-up

While advertisers call for greater transparency behind the scenes, consumers are demanding more from an outside perspective, too. Controversies over the misuse of personal data from some of the biggest players in the digital game are significantly impacting consumer attitudes to sharing information online. Add to this the implementation of GDPR, and consumers are being encouraged to think about where and how their digital data is being collected. Even after the implementation of legislation to make data collection clearer, 48% of consumers still don’t understand how their personal data is used and, with their trust in brands at an all-time low, action must be taken – the sooner the better.

A clearer outlook

As P&G’s Mark Pritchard stated, it’s going to require both time and money to resolve the transparency problem. But, while there’s no quick fix, vital steps are already being taken within the industry. In a recent IAB survey 84% of advertisers, publishers, and agencies stated monitoring brand safety as a priority; while a 2018 WFA report reveals increasing transparency levels with programmatic partners is on the agenda for 41% of advertisers.

Meanwhile, the IAB recently launched the Gold Standard, which improves transparency by applying the Display Trading Standards Group Brand Safety Principles, fights fraud through cross-industry adoption of the ads.txt initiative, and improves user experience through the Coalition for Better Advertising standards. Verified brands are awarded the certificate to confirm their commitment to improving the user experience and helping sustain the future of the industry.

In addition to these measures, action needs to be taken to mend relationships between media agencies and advertisers – and some agencies are actively working to improve understanding of the supply chain. One agency, for example, has developed an online portal that allows clients to view their ad spend in real time and shows the ROI for each channel. If agencies want to fight back against advertisers taking media buying in-house, measures like these must be adopted.

Finally, brands need to be more open about the data they collect from consumers, why they need it, and how it is stored. The World Federation of Advertisers has issued an online data transparency manifesto in a bid to increase industry respect for personal data, and build consumer trust in online advertising. The pay-off is great for brands that comply, as 94% of consumers are more willing to demonstrate loyalty to a brand that commits to full transparency.

While the challenge of transparency may not be resolved any time soon, the issue is being recognised across the advertising industry and there are steps all parties can take to work towards a solution. By implementing measures to ensure brand-safe placements and help limit ad fraud, improve relationships between brands, agencies, and programmatic partners, and bring clarity to consumer data use, transparency in the advertising industry can become a reality – not just an over-used buzzword.