It’s no surprise that in today’s digital world, where consumers are going online to buy everything from shoes to timeshares, digital advertising is outpacing traditional ad spending. eMarketer reports that in 2019, the total digital ad spend ($129.34 B) in the U.S. will surpass traditional advertising and keep growing to $172.29 B in 2021.[i]
eMarketer also predicts that by 2020, 86.2% of all digital display ads (out of a total of $65B) will be bought via automated, programmatic advertising channels. Of the nearly $19 billion in additional ad dollars expected to be allocated to programmatic ads between 2018 and 2020, the majority will go to private setups, such as private marketplaces (i.e., Google, Facebook, etc.). As buyers continue to be wary of the open markets’ transparency and quality of service (QoS) issues, they will increasingly rely on programmatic direct transactions.[ii]
Hurdles that reduce performance and lose bids
Programmatic advertising automates the processes and transactions that fuel purchasing. It dynamically places ads on websites or applications, making it possible to automatically purchase and place ads – including targeted advertising content – in milliseconds (ms). While impressive, for ad tech companies to win the real-time bidding (RTB) war and display their customers’ ads to the most consumers, they actually need to be completing these complex calculations and transactions within 100 ms (what Google, one of the biggest ad exchanges, places on a timeout restriction).[iii]
There are three tough challenges ad tech companies must overcome to achieve this caliber of performance and cost-effectively win programmatic ad bids:
- Transparency/Fraud: Increasingly, fraudulent ad publishers spoof ad inventory and then disappear. This, along with scammers that create fake websites with high user counts through bot activity, drive false data and bid pricing, costing advertisers in the billions of lost ad dollars annually.[iv] And with today’s decentralized ID synchronization, anonymized IDs are creating false data and bid pricing, contributing to the overbuilding phenomenon and further increasing costs. As a result, big brand advertisers such as Google and Facebook are transitioning to programmatic guarantees or other one-to-one direct setups to ensure spend is going to brand-safe, fraud-minimized publishers.
- Duplication: Duplication degrades quality of service as legitimate ad bid requests come in, but companies bid multiple times just to ensure bid traffic is received. This creates a phantom demand that puts a strain on demand-side processing systems and calls the reliability and transparency of results into question. As fraud and duplication issues grow, business overbuild IT infrastructures to handle the increase in traffic. This drives up costs significantly, widening the scale gap between the general ad tech community and the industry giants.
- Network Latency/Bid Success: High network latency regularly causes ad tech companies to exceed the RTB process time limit (~100 ms) because of slow computation time. This lag translates into lost bids and ad space, and can ultimately mean getting pushed out of sales channels because of consistently slow bids.
A new way to optimize ad tech environments
In response to these market challenges, Equinix and Unitas Global have created a joint solution to improve network performance, security and environment reliability across the programmatic advertising bid cycle. The Unitas Managed Ad Tech Solution provides advertisers with a fully managed, software-defined, end-to-end network, compute and storage environment delivered on Platform Equinix®.
For example, ad tech companies facing high network latency tend to allocate less time to perform computations, resulting in un-optimized bids, under- or over-valued impressions, and sub-optimal user targeting. The joint Equinix and Unitas solution enables < 100 ms latency through Layer 2 private connections via the Equinix Cloud Exchange Fabric™ (ECX Fabric™), bypassing the congestion and security risks of the public internet. This shaves vital milliseconds off the ad bidding process, creating more opportunities for ad tech companies to analyze, bid, serve and win more ad placements, increasing successful bids by 50%. This provides a higher quality inventory and faster data exchange that translates into more revenue and new business opportunities.
United Global Managed Ad Tech Solution on Platform Equinix
Leveraging ECX Fabric, direct and secure connections can be made to the Ad-IX ecosystem of 85+ ad tech companies, including ad exchanges, demand side platforms, data aggregators, content providers such as Spotxchange, BrightRoll, The Rubicon Project, Rocket Fuel and MediaMath. Businesses can also take advantage of private interconnection to securely access hyperscaler cloud providers (AWS, Microsoft Azure, Google). Equinix ensures that no matter how the internet advertising industry morphs over time with new players, tech platforms or metrics, ad tech businesses can adapt to change quickly and efficiently.
In addition, the joint Equinix and Unitas solution provides 24/7 fraud detection, decreasing the need for multiple validation points on inventory. Ensuring robust QoS in the bid cycle to reduce duplication, Unitas manages QoS between bid partners to reduce the need for duplication and mitigate fraudulent bid requests, which results in lower costs. Unitas has also created a standardized, more competitive cost approach to ID synchronization through a common ID table. And with services from the Equinix Marketplace of technology partners, advertisers can leverage fraud detectionteams and tools from partners such as White Ops, Factual and others, which constantly check and audit online fraudulent activities.
The Unitas Global Managed Ad Tech Solution on Platform Equinix is globally scalable across the 200 Equinix International Business Exchange™ (IBX®) data centers worldwide. Learn more about how Equinix and Unitas are revolutionizing programmatic advertising by making ad tech businesses more digital ready.
[i] Adweek, “U.S. Digital Ad Spend will Surpass Offline in 2019,” 2019.