Open Exchange Can Still Be a Key Driver at Delivering Programmatic Excellence

Since the term ‘programmatic’ gained traction way back in 2012, Open Exchange buying has been the foundation of Programmatic advertising and the gateway into auction-based trading for display and video. However, the evolution over the past 10 years has seen alternative buying methods emerge and an increased scrutiny on the quality of inventory that is accessed via the Open Exchange. A recent study from the Association of National Advertisers which investigated campaigns delivered on the Open Web in the US, reported that Made for Advertising (MFA) sites took a 21% share of the 35 billion impressions tracked in the report, highlighting there is a still a problem around wastage and transparency in the programmatic supply chain. 

We are also seeing a seeing a shift in how programmatic inventory is being bought. eMarketer reports that in the last 3 years (2020-2022), PMPs (Private Marketplaces) have gained a higher share of Programmatic ad-spend vs Open Exchange in the UK. Issues around transparency, supply chain costs, brand safety, ad-fraud, and the impending death of the 3rd party cookie (Google is set to phase out third-party cookies in Chrome in 2024) has prompted this shift. PMPs enable buyers to control the supply chain, achieve higher win rates, curate inventory with sell-side targeting, enrich media with publisher data and have more upfront decisioning on the right inventory with publishers, and so are well positioned to be an integral part of a programmatic execution. Curated Marketplaces have also started to gain traction, which hand-picks the ‘best’ of the Open Exchange and can be accessed through a Private Deal. These solutions offer greater control, a reduced risk of ad-fraud and rich targeting opportunities. This can come at a higher cost to advertisers and require more operational resource, but it is a premium many are willing to pay.

As emerging environments that are reliant on direct connections with publishers grow in the programmatic space, Open Exchange will continue to be surpassed in spend by Private Marketplaces. That said, I believe it still has a part to play across upper, mid, and lower funnel objectives (especially for digital display activity) and that we as an industry should work to improve and fix the ongoing challenges rather than abandon altogether.

Applying a mixture of quality control and brand safety best practices, testing new data and measurement opportunities, and using new methods to optimise can deliver results in this space. 

Ensure you have applied rigour in set-up and delivery

Open Exchange remains the quickest and most agile route for buyers to execute a campaign programmatically, but there is a lot of work in the background required to ensure that the buy will deliver to the highest standards possible. Using and maintaining an inclusion list and exclusion list that is the appropriate size based on your KPIs (this needs to be a number that can be managed operationally and has been manually curated), ensuring that domain delivery is reviewed for each campaign, deploying advanced brand safety measures to ensure both pre and post bid tactics are in place, and measuring and optimising towards meaningful metrics (such as Attention) should be best practice already. Working to these standards may mean you pay a higher CPM, but in turn it will reduce wastage.

Test the array of options available for a post-cookie world

As the deprecation of third-party cookies looms, reaching addressable audiences on the Open Exchange is under threat. Google’s Privacy Sandbox and the EU ID initiative (which will require consent from users by providing your email address to a publisher) are perhaps our greatest hope of maintaining current targeting practices but there are also many cookieless audience solutions out to market that are ready and appropriate for testing.  

In the meantime, contextual targeting is proving to be an adequate alternative. At PHD, initial tests we have carried out were mixed, but we are starting to see positive results in this space where benchmark KPI’s are being met or surpassed. There is also the rise of Retail Media, which isn’t just limited to walled gardens with retailers making their data available in Exchange environments too. Now is the time to test.  

Start to measure the Carbon Footprint of your buy 

The emergence of carbon footprint measurement has enabled advertisers to look under the bonnet of programmatic campaigns and their resultant emissions for the very first time. Vendors such as Scope3 can report back on carbon emission levels at site, creative and device level amongst other metrics. This can inform how inclusion and exclusion lists are managed going forward or how creative formats are prioritised as greener alternatives are favoured. Expect to see more optimisation opportunities built into tech stacks as this space evolves over time.

Enhance your buy using Custom Algorithms

Open Exchange has always been a significant driver of efficiency for performance campaigns due to its lower price points and automated optimisation within Demand Side Platforms. This can further be enhanced through the introduction of machine learning solutions and Custom Algorithms that enable smarter bidding decisions related to business outcomes that can go beyond standard media metrics. 

The emergence of different buying routes and tactics for Programmatic has presented advertisers with an array of options that can be feel overwhelming when deciding on the right path. Whether it be Open Exchange, Private Marketplace, or Curation, if the KPI is right, look to test all of these in tandem - compare performance using metrics that matter, scrutinise ad-fraud and brand-safety metrics, look at where domain and app spend is being delivered and measure the carbon footprint of the buy to determine what is working best. Open Exchange may not be the shiny new kid on the block, but it may just hold its own against alternatives and will no doubt evolve for the better.