Trading Desks: Realities and Perspectives in Programmatic

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Digital advertising industry is evolving faster than any other industry. Every year it undergoes changes that face all participants of the programmatic market. Nowadays the industry expresses its strong concerns about issues like transparency, brand safety and ad fraud.

This pressure has forced trading desks to take specific actions to create a more healthy digital ecosystem.

What do we know about trading desks?

A trading desk is a centralized, service-based organization that has access to multiple DSPs (also known as a “DSP manager”); its function is to administer ad inventory, customize ad placements and execute media buys.

Trading desks are aimed to improve customer’s advertising performance and receive increased value from media advertising.

Conventionally, trading desks employ three models to display media: SEM auction, paid social media advertising, and RTB auction. SEM auction implies the display of media according to the keywords and ad text that match the query. The winner selection depends on the advertiser’s Ad Rank: CPC Bid (the highest price the advertiser is ready to spend) and Quality Score ( the overall picture of the advertiser including its click-through rate, landing page quality and relevance). Another way to display media is to promote brands through paid marketing on social networks (Facebook, Instagram, LinkedIn, and etc). In this case, trading desks make auction-based buying on the basis of CPC or CPM model to display advertising. In terms of RTB auction, the buying and selling of online ad impressions is done in real time for the transaction of one single impression at a time. The auction is repeated in milliseconds for every available impression.

Pressure points

So far, advertisers voice concerns about efficacy and viability of trading desks. Indeed, it appears that trading desks lack transparency and brand safety. This is reflected in hidden fees, puzzling auction algorithms, bias towards publishers, and etc.

The supply chain is extremely long, which leads to absence of control and administration over received publishers’ traffic. In reality, trading desks don’t have access to the publishers’ ad inventory. It means that when Ad Networks send traffic to the trading desks, the last ones can receive low-quality, fraudulent or fake “premium” inventory. What’s more, this is reflected in the increase in the final price of ad inventory and the fee itself becomes not transparent for the advertiser.

So, the above-mentioned factors result in unreliability of the current trading desks’ model.

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Improve quality, you automatically improve productivity.W Edwards Deming

The trading model is no longer sustainable, and trading desks should look for something new. In order to remain viable and competitive, tradings desks should, ideally, reduce the number of elements in the supply chain and get better control over supply.

This requires introduction of its own curated exchange of medias with tested, high-quality inventory (no long-tail publishers, fuss over programmatic direct setup, low-quality or fake inventory) and one-time investment in agile and future-proof technology (no extra fees related to media budgets). Soon there will be no alternative but to find the most appropriate solution to the problem. However, we are ready to introduce you to Adoppler, a unified solution from the technical headache. It acts as a painkiller in many different ways.

Firstly, Adoppler will curtail the supply chain significantly, giving trading desks immediate access to direct publishers. This leads to more transparency (publishers are integrated directly, so their inventory is transparent), allows a more productive way of managing media buying processes, eliminates hidden fees, and etc. As a result, trading desks can provide advertisers with possibility to have control over their spent budget, supply and performance, so that they gain more trust from the advertisers.

By the way, the solution provides tracking, analytics, reporting, statistics and fraud detection system. With Adoppler integration you will get both OpenRTB and server-to-server Header Bidding. In addition, it takes an access to our portfolio of SSP and DSP partners and can be easily integrated into any ecosystem. Such a comprehensive solution enables to reduce expenses for technology maintenance and support greatly.

We believe that the coming years will contribute to creating a more advanced, transparent and controlled digital advertising ecosystem.