Advertisers print great technology to adopt standards for transparency in advertising sales

Copyright © HT Digital Streams Limit all rights reserved. Patrick Coffee, The Wall Street Journal 4 min Read 08 Oct 2025, 05:25 IST German pharmaceutical giant Boehringer Ingelheim wants more transparency from the auctions it uses to buy dozens of millions of dollars online advertising, says Katherine Freeley, who oversees us. PHOTO: REUTERS SUMMARY A new proposal calls for digital advertising auctions to voluntarily announce how they choose winners and determine prizes. Some of the largest advertising industry players have teamed up to propose new transparency standards in the digital auctions that increasingly dominate the sales of advertising. These auctions determine which ads appear when someone opens a website, does a search, playing a video or browsing a social media feed. Eighty percent of all digital advertising sales occur in the “closed loop” auctions run by one major player, according to the Media Rating Council, the self -regulatory body of the industry that published the proposal last month for comment. Auction operators, including Alphabet’s Google, Instagram parent -meta platforms and Amazon.com, decide how much to reveal about their processes to advertising buyers. However, those who adopt the MRC standards will agree to disclose key information, such as the types of auctions they manage, how they decide winners and what the prizes affect their platforms, including any fees, discounts or at least. They will also promise to disclose any significant changes. “We are trying to bring sunlight into the ecosystem,” said Ben Havaness, chief media officer of OMD Worldwide, an agency in the giant Omnicom, who approached MRC almost two years ago to develop the standards and chaired the management committee. The proposed revelations are for advertisers because the auctions do not always go to the top bidder, and the ultimate price paid is not necessarily what the winner offers. The winner in a so -called second -prize auction, a format designed to encourage higher offers, pays a small amount more than second place. Most digital ads are sold by ‘modified’ second-prize auctions, in which bids can only be one factor to win with elements, such as a relevance scores focused on the chance that a consumer will buy an advertised product. US District Judge Amit P. Mehta wrote in a decision last year that one of Google’s practices artificially increased the predicted click rate of runners-up at its text-search advertisement auctions, which also makes it more competitive and “which prints the upward prices.” Many auctioneers do not reveal what types of auctions they drive. The lack of transparency prevents advertisers and publishers to make informed decisions about which auction platforms they use and how, according to Hevaness. It also opens the door for the platforms to manipulate the auctions, Havaness said, for example by entering their own bid and raising prices in the process. Or an auctioneer can reduce his bid -minimum in response to competitors, which may undermine prices without the knowledge of the publishers who provide the stock. Hevaness has estimated that the impact on the cost of buyers and the sellers’ revenue contributes billions of dollars over the years. The standards would not require auctions to work in any particular way, and participation would be voluntary, although parties who agree with audits would be eligible for a new MRC accreditation. If they look under the bonnet, the proposal is not mentioned by the name, but it comes because regulators had unprecedented interest in digital advertising auctions. A federal judge oversees the court proceedings to determine remedies after deciding in April that Google has built up an illegal monopoly around the technology that has auctions for display ad stock. And Mehta, the judge who decided on Google Search Auctions, last month ordered the company to disclose any material changes to its procedures “to promote greater transparency in the prices of search text ads and to prevent Google from raising its advertising auctions in secret.” Google plans to submit appeals in both cases, saying that consumers and businesses choose their products because of their quality. Organizers of the proposal, led by Omnicom and MRC with contributions from the large trading groups that advertisers, agencies and companies involved in digital advertising do not intend to identify all participants before being finalized. But working group members included Meta and Amazon, the second and third largest digital advertising platforms, according to people familiar with the matter. Google, the biggest, refused to participate, people said. Advertisers’ only real source of leverage with auction platforms has long been their ability to warn them, “” I’ll give you less money, “says Katherine Freeley, who oversees US advertising planning and investment for German pharmaceutical giant Boehringer Ingelheim. They hope that the rules of the auctions will give them another tool: information. Boehringer Ingelheim spends ten millions of dollars each year with the largest digital advertising platforms, says Freeley. If certain auctions take on the standards and others do not, the company can reconsider its expenses with the containers, she said. Some industry players say the proposal has defects. Any transparency would be an improvement because technical enterprises today “keep their auction mechanics completely hidden”, says Kelly Abcarian, a former executive vice president of advertising measurement at NBCUniversal and a veteran of measuring firm Nielsen. But MRC can anyone adopt the standards or do worse than drawing accreditation from those who do not meet them, Abcarian said. And even auctioneers who reveal everything will remain free to design and implement auctions as they please, she added. “Standards without compulsory adoption create false confidence,” Abcarian said. “We will still rely on the platforms to define their own rules, apply their own models and report their outcomes themselves.” Garrett Johnson, associate professor of marketing at Boston University Questrom School of Business, says large platforms can, according to the proposal’s proposal, instruct them one or more employees to ensure compliance. The promise to announce any changes can also be a hard sale, he said. “Once you start revealing how you do things, if you deviate from it, it leaves you open to legal challenges,” Johnson said. Write to Patrick Coffee at [email protected] Catch all the corporate news and updates on live mint. Download the Mint News app to get daily market updates and live business news. More Topics #Technology Read Next Story