PII

How To Fix Media Asset Standards So They Don't Suck

Standardization can seem like a technical topic but it is simply the domain model (the rules that 'govern' ). In the past standardization seemed difficult because the individuality of media assets created an illusion that a standardized domain model for media assets was impossible.

Some think that applying a standard to media would mean forcing a set of descriptions that everything should fit within. Like the way the IAB created a set of context standards that seek to capture all contexts. But what if the standard is not about restricting what descriptions are acceptable but rather about standardizing the way descriptions themselves are created. In other words, any type of descriptor can be added to a media asset, so long as it is done in a way that the system, can understand. Like Mendeleev’s periodic table, the system has a place for newly discovered elements, even though we never knew they existed.

In Chemistry, 19th century researchers faced the same problem. ‘We have all these elements, but how do we standardize our understanding of their respective relationships?’ To solve this problem in chemistry, a new domain model had to be created to bring rational order. While it may have seemed impossible before the problem was solved, afterwards it seemed completely obvious.  Dmitri Mendeleev solved the problem in 1869. His genius was in building a model that simultaneously defined how the elements are similar to each other and how they are different from each other, in more than one way.

Like Mendeleev, media solutions need to conform to a standard that defines how we order the information in the domain, not limit what information can be contained in the domain. On a side note, some of the marketers making periodic tables of marketing are doing it wrong. They don't actually understand why the periodic table is so brilliant.

Most folks in media that we have talked to question the ability to standardize media assets because they can only imagine domain models based on similarity or difference.  The beauty of Mendeleev’s arrangement is that the relationship between and element and its neighbors to the left and right are always the same. The relationship to the elements above it and below it are also always the same. In other words, the elements are arranged such that they show how they are different from each other by showing how they are like each other. Media standards need the same type of domain model.

Periodic Table trends
Periodic Table trends

To build this domain model we have to understand the relationship between two different media assets (two ‘atoms’) and figure out where they belong in the domain relative to each other (their ‘location’ on the ‘periodic table’).  Most media technology was not build to handle transactions, so it did not need to standardize the domain model for media assets, it standardized the communication of transaction requests, e.g. RTB protocol.  For the exchanges and other technologies that were designed for managing transactions, that part of the system was simply ostriched. Why? Because the second price auction does not need to know what is being auctioned to be successful, it simply manages bids and price floors. This was a design feature, not a bug. Since second price auctions are being used to sell an impression in real time, it doesn’t much matter what the impression is, it only mattered who will pay the highest price.

When we want to trade avails (read media futures) we and the auction itself need to understand what is being bought and sold. Since there is so much uniqueness in the domain, we decided to reverse the perspective. Instead of trying to define what makes one piece of inventory unique, we define how it is different from everything else. We can work by inclusion or exclusion, the results are the same. So in technical terms, each piece of information describing a media asset is a vector. Each media asset is a collection of vectors.

In practical terms the ‘standard’ is a way of ordering the information submitted to the system. This means the system incentivizes conformity without demanding it. For example, there can be two competing methods of defining context, but both buyers and sellers have strong incentives to choose what is best for the market. So, if two competing standardization systems will yield the best outcomes, the domain must support both. If one standard will yield the best outcomes, the domain must support that as well. The standards create an incentive to find the optimal solution, the domain does not define the optimal solution.

Like Mendeleev, media solutions need to conform to a standard that defines how we order the information in the domain, not limit what information can be contained in the domain.

PII issues will never go away with real time bidding

Houston, PII has a problem
Houston, PII has a problem

PII issues have long been a point of discussion among us all.  In all that talking and discussing, we never uncovered the root cause of why PII issues are such a dominant force in the current real time bidding market architecture. I propose that taking another point of view at the problem reveals that it is a direct outcome of the market architecture and not a side-effect of some other economic inefficiency. The current market architecture in real time bidding is a ‘call-and-response’ system. One side, the seller calls, and the other side, the buyer responds. This means that the entire market is dominated by the way sellers define their demand. In simple terms, if no one is selling what I am specifically looking to buy in the market, how do I market my demand?

This means sellers need to express their supply so that buyers will bid. Economics teaches us that in this situation, the seller is best served by providing as much information as possible on this impression, so that the maximum number of potential buyers is achieved. In other words, there is an economic incentive to say as much as possible about the impression.

The problem with this market architecture is that sellers can’t search for buyers before the inventory shows up. If a seller could search for demand and elect to meet some of that demand with their supply, the only information transferred during the transaction is that this audience member and ad placement unit meet the criteria of the buy order. So, if a seller never meets demand that violates PII standards, all transactions will be free of PII issues. In a market structure where demand can be transparent, the incentive is to share as little information as possible. This is the opposite market structure incentive from that of the real time market architecture.

The real time market architecture segregates supply and demand to the ‘call’ side or ‘response’ side, the market self-defines itself as an asymmetric market. For some inventory acquisition strategies like retargeting, this is a great, and most probably the most optimal, market structure. But, for big brands this market asymmetry is bad. We all know that they buy huge swaths of audiences across all media to build their brand. For these buyers, the real size of the transactions ($) they want to make is not accounted for in the second price auction. That auction does not know or care that you have a $25K budget for this line item.

This is a problem. By leaving this demand out of the price calculations we are effectively only looking at the tips of icebergs; and we still have tons of PII issues. If you are a marketer or a publisher navigating your boat through these treacherous waters, no wonder you’re fed up.