On January 1, the South China Morning Post (SCMP) became the first publisher in Asia to withdraw all its inventory from the open marketplace (OMP) and offer a non-OMP solution that benefits advertisers, agencies, and brands. OMP spending has shaped the way most display media is bought and sold around the world, and has developed into the primary activation channel for most digital brands.

While this has improved buying efficiency and led to a better ROI, the OMP also presents problems for both agencies and clients:

1. Media value loss

This is the main issue buyers face; a complex ecosystem of intermediaries each take a certain percentage of the original cost per 1,000 impressions (CPM). The ISBA, an organisation representing leading UK advertisers, recently released a Programmatic Supply Chain Transparency Study indicating that, on average, 49% of the original media value is lost.

This means the OMP buyer may be less competitive than direct buyers and may not be able to access some inventory.

2. Priority and reach issues

Sponsorship-level deals get access to the first impressions of a user. This is important if you want to reach specific, hard-to-find users. Having more inventory allows a more even delivery and better campaign optimisation. It also allows access to options such as hard-to-buy formats and context.

What this means for advertisers and brands is that the OMP is at the bottom of the ad stack and buyers must make do with what is left.

3. Ad fraud

This may be caused by things such as bots (fake clicks), domain spoofing (e.g. SCMP.co.uk), or click farms.

The world of digital advertising is hard to police and monitor. Although some companies such as WhiteOps and initiatives including the IABs Ads.txt have had some success tackling or even taking down major bad actors, the technology that is used to defraud buyers and sellers grows in complexity all the time. 

4. Ad targeting data issues

On-target data from companies such as Nielsen and ComScore have shown data used to activate campaigns may be less than 50% accurate. A ComScore vCE Benchmark from 2014 showed that the average accuracy for finance targeting was only 44%.

5. Brand safety issues

While the commonly used tools of IAS and Grapeshot have helped make the OMP a safe advertising environment, they are not perfect. They require a URL to get significant traction before they will read and categorise the content — if they can read it at all — as all apps require a publisher-side SDK (software development kit) for the technology to work.

Also, keyword lists need to be so broad that they often cut out quality sites or block access to key users, as you cannot check a longtail of 2,000 or more sites for editorial standards. This leaves brands vulnerable in the OMP.

Looking to alternatives

With the growing concerns the OMP presents for advertisers and publishers, it is getting more challenging to create efficiencies that drive success.

We believe programmatic deals offer brands and buyers a better way to transact programmatic media than the OMP. It allows us to optimise efficiencies and increase advertisers’ ROI by connecting our market-leading first-party data and persistent user IDs to programmatic deals (preferred deals and programmatic guaranteed).

Marketers can potentially gain from non-OMP advertising solutions. Benefits include:

1. Increased buying transparency

With fewer intermediaries, we have more control and transparency. This allows us to pass important buying information back to the buyer and optimise the campaign to the chosen KPI (key performance indicator) more effectively.

The buyer can use this information to engage in supply path optimisation (SPO), or the practice of optimising your supply path to ensure the maximum ad budget is allocated to media.

The agency also maintains the overall centralised buying efficiencies afforded by programmatic buying, i.e., more control on spend, client data application, SPO cost reduction, and ease of set-up. 

2. Higher quality data

SCMP Lighthouse audience segments have been built with first-party declared and observed data that allows us to know the precise quality of every attribute and make segments available with known ad quality. The fewer intermediaries, the less chance there is for ad fraud to occur. 

3. Fewer brand safety issues

SCMP SIGNAL is our market-leading brand safety tool. Built directly into our CMS (content management system), it ensures every article is tagged and measured before going live. This allows a brand to fully take advantage of our audience- and insight-led targeting and open up the full capabilities of SCMP’s KPI optimisation. 

4. More targetable attributes

This may be the biggest single difference in the future. The third-party cookie will be deprecated and the IDFA (identifier for advertisers) will be restricted to advertisers. With that comes the end of several key drivers for the OMP. Basically, the marketers’ ability to create a relationship with a user and then build on it to drive that user down a funnel will be eliminated in the OMP.

SCMP will be able to create an ongoing relationship with individual users as we have migrated to first-party cookies and user logins that do not degrade over time. These attributes will help SCMP to meet our clients’ branding needs and drive ROI.

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