Viewability: The Long And Winding Valuation Road

Over the past few months, the discussions in the marketplace about viewability have been important in establishing the importance of actual delivery. The most pithy view of the discussion was a quote from  a senior agency ad tech executive -  “Expectations are that if you buy an impression, it’s being viewed. Period. For that reason, I’d be surprised to see anyone agree to pay a premium for certified viewable impressions over today’s rates but would expect CPMs to start to fall.” If you believe the validation angle, the point about premium is spot on. In reality, the world is filled with people trying to 'work the system' and removing unviewed impressions will create supply constraint. So, he's right and wrong at the same time. No one will pay a premium for certified viewability, but prices will go up regardless, as supply is constrained.

In nearly all significant transactions, a third party is called upon to provide a quality validation service. In the diamond market there is GIA certification, when buying a house an engineer inspects, CPG organic products have certifying bodies, when completing a merger the target is audited. Why should advertising be different?

Ads that are bought should be viewed, it's that simple. If the ad was not viewed, then nothing was really delivered by the publisher. In print, proving that an ad was delivered is accomplished by a tear sheet. Since a print publisher can not prove an ad was seen, they have to prove the ad was included in the publication. To do the same, digital advertisers inserted their own ad servers in to the stack, they essentially create their own tear sheets when the ad call was received.

So where does this leave us? Simple, buyers want confirmation that they got what they paid for. Confirmation of delivery, confirmation of view, and confirmation of audience. In short, every element key to value validation will be confirmed by a third party in the near future. It started with advertiser ad servers, then click fraud identification, followed by view confirmation, and the new frontier - audience segment guarantees via PII data.

With all this validation scaling through the ecosystem, a real exchange is unleashed to become a super-powered price discovery engine. Knowing exactly what is being bought and sold let's the buyer bid without worry, as they know exactly what they are getting. We welcome all of these services with open arms. Why? Because an exchange works to provide a facility for establishing a common price for a shared understanding of value. Better understanding of value means markets work better.