October 23, 2015
Ask an Expert: Sociomantic’s Head of Supply on Transparency and Eliminating Quality Contamination
John Murphy, VP, Marketplace Quality at OpenX
It’s irrefutable – quality remains a top priority for advertisers and underpins the health of the advertising ecosystem. At OpenX quality inventory is our hallmark. We stand behind every piece of inventory in our exchange and are committed to tackling fraud head-on; to do so requires that we invest in the right technology and enforce rigorous quality standards. Our focus on quality also means that we align with partners like Sociomantic Labs, a leading DSP that buys media on behalf of more than 2000 clients, who takes a stand against fraud and is actively working to eliminate buying from SSPs with low quality inventory.
This week, we had a chance to speak with Alex Reinhold, Sociomantic’s Head of Global Supply, to learn more about Sociomantic’s Supply Quality Index, or SQX, a grading system of programmatic inventory suppliers which aims to bring transparency to buying decisions and in the process increase quality standards across the board.
OpenX: What prompted Sociomantic to develop the Supply Quality Index (SQX)?
In late 2014, we wanted to ensure that we were exclusively participating in transparent 2nd price auctions across our 40 SSPs. Initial conversations with these SSPs were easy and straight-forward, as all of our partners happily confirmed – only verbally though – that we were paying the price of the 2nd best bid. However, when we asked for respective clauses to be added to our contracts, many of them did not reply or explained why the clauses were impossible.
This was the instigator for us to dig deeper and unravel the supply “blackbox” to understand where our advertisers’ money was actually going. It was then that we launched the Sociomantic Supply Quality Index (SQX) which factors SSP/Ad Exchange quality into our bidding by rating our partners based on three measures – transparency, performance and inventory quality. The measures are then combined to make up a dynamic score that we multiply by our intended bids. Sociomantic is the first programmatic buyer to assign a quality score to bids in real time.
What is it about OpenX’s inventory that is important to Sociomantic and its clients?
Based on our data and research, we know that OpenX is one of our most trusted SSPs. The degree of flexibility and transparency associated with our buying on the OpenX platform is almost unparalleled.
Instead of getting five engineers on the phone to explain why things are not possible, OpenX is always ready to adapt their engine to provide us with the technical means to understand what is happening with the dollars we’re spending. Transparency into publisher pricing controls and auction mechanisms are as important as the quality of the inventory we’re bidding on. Moreover, performance is exceptionally stable as compared to other SSPs.
What does the SQX mean for Publishers? And for Advertisers?
Publishers often use a range of SSPs to make their inventory available programmatically. SQX helps publishers to understand which SSP delivers the best quality. Using the data from SQX, we can confidently inform our publisher partners about the SSPs they can trust strictly based on data. With that in mind, the idea is to promote quality and accountability in an objective way.
For advertisers, SQX functions as a quality protection. With SSPs complying with the quality standards we set, we expect a sustainable, positive impact on both performance and brand safety for advertisers.
Having now launched SQX internally, what are the next actions Sociomantic plans to take?
SQX is a growing algorithm. Currently, the index encompasses three measures, but given we are constantly integrating new factors into the algorithm, more measures could be added in the coming months. Our SSPs will then be provided with a detailed manual that outlines what we deem as “high-quality”. In essence, this will automate many of the conversations we usually have during quarterly business reviews with our partners. It’s a fairly simple equation: the more quality you deliver, the more we will buy.
How does Sociomantic effectively grade its programmatic inventory suppliers?
Obviously, I can’t go into too much detail here. What I can say is that based on a range of factors that comprise our three measures – transparency, performance and inventory quality – we calculate a supplier-specific score in real-time. That happens on the basis of large data analyses on the back of our constant bidding activity. In order to calculate our effective CPM for an impression, we simply multiply our intended bid by the supplier’s SQX score, which ranges from 0 to 1.
How have your clients responded to the SQX?
Advertisers love it. One of the prevailing problems with programmatic is the lack of trust associated with it. A vacuum of transparency in combination with large volumes of impressions traded bears certain risks and violates trust. That’s why advertisers and publishers are thankful for any measure taken to eliminate the contamination of quality – and by that I also mean efficiency.