On Tuesday 28th September 2021 the ACCC’s final report for the Digital Advertising Services Inquiry was released, this 198-page report provides an overview of the ACCC’s analysis of the sector and a number of recommendations for Government.
IAB Australia issued a brief media statement on the release of this report on the day:
“Ad funded digital media and services, supported by the ad tech sector, perform a critical role in the digital economy. The ACCC’s detailed Digital Advertising Services Inquiry Report has implications for many aspects of the ad tech sector and the IAB looks forward to working constructively on behalf of the industry with Government on the key issues it raises and to continue to build confidence across the ad tech ecosystem.
The digital advertising industry is focused on ensuring advertising technologies prioritise consumer privacy and accountability in the development of targeting, measurement, and attribution solutions. We recognise the critical importance of transparency across the Australian ad tech supply chain and are actively working to develop measures that work for advertisers and publishers, as well as consumers.”
ACCC Findings and Recommendations
The ACCC recognised that advertising technology services perform a critical role in the digital economy and help Australian businesses ensure their advertisements reach consumers and are essential for many online publishers to monetise advertising space and fund online content.
However, according to the ACCC competition in ad tech services is ineffective and one of the reasons for this is the lack of transparency across the supply chain. The ACCC have made six recommendations to Government based on their findings:
Recommendation 1: Google should amend its public material so that it clearly describes how Google uses first-party data to provide ad tech services
Recommendation 2: The ACCC should be given powers to develop sector specific rules to address conflicts of interest and competition issues in the ad tech supply chain. The rules would apply to ad tech providers that meet certain criteria linked to their market power and/or strategic position
Recommendation 3: The power to introduce sector specific rules should allow the ACCC to address competition issues caused by an ad tech provider’s data advantage
Recommendation 4: Industry should establish standards to require ad tech providers to publish average fees and take rates for ad tech services, and to enable full, independent verification of demand side platform services
Recommendation 5: Google should provide publishers with additional information about the operation and outcomes of its publisher ad server auctions
Recommendation 6: The ACCC should be given powers to develop and enforce rules to improve transparency of the price and performance of ad tech services. The rules would apply across the Australian ad tech supply chain
These recommendations broadly fall into two categories:
Sector specific (mandatory) rules – to address conflicts of interest, prevent anti-competitive self-preferencing, address data advantage issues (via data separation or data access measures), and transparency problems – they should only apply to those providers that meet certain criteria (linked ot their market power or strategic position). These rules should be proportionate, not place undue regulatory burden on the sector, and be flexible and adaptable to a dynamic digital environment. The ACCC should have responsibility for enforcing the rules. (Recs 2 & 3)
Industry-led (voluntary) standards – that require ad tech providers to publish average fees and take rates for ad tech services, and to enable full, independent verification of demand side platform services. The ACCC has indicated however that, if voluntary standards are not effective in achieving transparency, or the standards are not made within a reasonable period of time, the ACCC should introduce mandatory rules in this area as well. (Recs 4 & 6)
The Government Process from here
The ACCC has given clear recommendations into Government about what it thinks should happen from here. We now need to hear from the Government on its views, support or otherwise of these recommendations, and the details and timeline for implementation.
Timing on this is currently unclear but the ACCC did note that, “how the recommendations should be given effect, including the legal framework for the proposed rules and powers, will be considered as part of a broader ACCC report due in September 2022”.
IAB Australia’s Role
IAB Australia will be working with our members, affiliated industry bodies and Government to work through the recommendations and, in the context of the important work the industry has already done, assess the best way to work with Government and approach the development of industry led-standards.
The IAB locally, globally and in collaboration with other industry groups has already developed and is in the process of further expanding transparency initiatives, as well as guidance and technical standards to implement these initiatives. These will form an important basis for further collaborative pan-industry discussions and work with Government.
Below is a summary of these initiatives, more information and links to further reading.
Transparency Standards
What is currently in place?
A full suite of both supply-side and buy-side programmatic transparency technical standards are now in place having been released by IAB Tech Lab. When competently utilised these provide full clarity into how ad impressions interact with ad exchanges from the perspective of both buyers and sellers and all the different parties involved in-between.
Additionally, these standards also have tools that can fully retrospectively interrogate the paths travelled by ads through both the supply-chain and the demand-chain. These insights can be used to better optimise future programmatic activities for both buyers and sellers.
The ACCC report has acknowledged these programmatic transparency standards in its reports and we now see the ACCC’s recommendations as an opportunity for the industry to build upon these specifications and provide even greater transparency across the programmatic ecosystem.
To better service these specifications IAB Tech Lab, who technically oversee both these and the ORTB protocols which enable all things programmatic, are developing a full set of maintenance and validation tools to be made available within a Transparency Centre. The supply-chain validations tools exist now and we will be running a webinar on this topic on Thursday October 21st.
What else is in development?
Imminently due (within days) are the release of updated protocols and a new level of security for buyers to protect them against fraud.
ads.cert – authenticated connections protocols for programmatic trading, enabled via cryptographic security, guaranteeing buyers that they are obtaining genuine ad trade opportunities
OpenRTB 2.6 – updated protocols that integrate current trends and allow for improvements in programmatic technology
What is now required?
The industry will continue to work collaboratively to develop an industry wide approach to technical standards that enable greater transparency in the flow of money related to all transactions through both the programmatic supply and demand chains. This will enable automated auditing of all related costs, take-rates and margins obtained by all the participants involved. We see the IAB Tech Lab standards as key to achieving this outcome.
The approach has to be collaborative across the entire industry, bodies and those involved. We must also strike a balance between transparency and creating unnecessary friction and/or additional costs in leveraging the programmatic ecosystem. The opportunity for Australia is to take the lead on an issue that is global and leverage the work of the ACCC to help evolve the standards to become ubiquitous, genuinely transparent, meaningful and workable for all involved.
Considerations for publishers – fuller transparency should provide benefits related to full insights on all related costs, the ability to better compare vendors and both leverage and provide actionable insights for improved demand and supply side optimisation (SPO and DPO).
Considerations for buyers – as above, coupled with a requirement to adopt the required standards (as sellers have) and be fully transparent across activity, transactions and ultimately increased granularity in the details of spending.
Considerations for tech vendors – insistence on the usage and adoption of transparency standards by all clients and a commitment to full, open and collaborative testing.
References, links and further reading
Sell-side standards:
https://dev.iab.metrixadigital.com.au/resource/open-rtb-update-iab-tech-lab-sept-2019/
Buy-side standards:
https://dev.iab.metrixadigital.com.au/buy-side-trans-standards-update-explainer/
Transparency Centre:
https://iabtechlab.com/software/transparency-center/
ads.cert draft release:
https://iabtechlab.com/ads-cert/
Related blog articles:
https://www.exchangewire.com/blog/2020/05/14/upgrading-transparency-standards-from-optional-carrots-to-mandatory-sticks-jonas-jaanimagi/
Australian Digital Advertising Practices:
https://dev.iab.metrixadigital.com.au/adaps-2020/