Over the last 6 months or so, I have noticed a dramatic increase in the number of online advertising contracts requesting fourth party billing. Fourth party billing occurs when the advertiser, through their agency chooses to serve a creative from one vendor, say Eyeblaster, but wants the impression reporting and billing based on another vendor such as DoubleClick or Atlas, making them the fourth party.

At first thought this seems crazy, but it really doesn’t get any better the longer you think about it, it stays crazy.

This is accomplished in a few different ways, basically boiling down to one of two methods. For lack of a better term we can call them front-end and back-end. In the front-end system, information is embedded in the third party creative script that calls the fourth party vendor to log an impression. In the back-end setup, all the logging is done by a back-end call from the third party vendor to the fourth party vendor, without any exposure in the creative source.

While front-end can be a little easier for a publisher to manage, neither of these setups is truly ideal for a few different reasons.

Let’s start with front-end tracking. This means that there is a code in the 3rd party creative trafficked to the publisher that will initiate the call to the 4th party vendor. In most cases this code is obscured and not readily apparent when looking at the code. To the best of my knowledge, only Eyewonder has an implementation that clearly shows the relative fourth party tag. Even Eyewonder doesn’t always seem to use this format, but when they do, it greatly enhances the publisher’s ability to establish the relationship and track and bill the item correctly. Sadly, most other front-end implementations use codes that are not part of the normal reporting process and don’t make the relationship clear. Even when that is the case, front-end tracking has the advantage of locking the relationship between the third and fourth parties and preventing the creative change out issues that back-end tracking can have.

Back-end tracking accomplishes the same objective, logging an impression from the third party to the fourth party, but it does it completely on the back-end. The third party doesn’t embed the tracking in the creative, instead using a system setup option to create the relationship on their end.

There are 2 big problems with this approach. First, there is no way for the publisher to even attempt to establish the relationship between third and fourth party tracking since the creative script doesn’t even carry a clue about the details. The second challenge is that the vendors can change out the relationship mid-flight without any notification to the publisher.

There are also the general problems of both methods. Since publishers are asked to serve a creative from one vendor, but report delivery through another vendor, the publisher needs the relationship clearly defined. However, agencies don’t seem to get this and rarely provide any documentation that would help clarify it. In fact, agencies often seem to completely lack any understanding of this arrangement that they themselves create.

Imagine that you have a VISA credit card and one day you get a message from them telling you that you are now required to pay your VISA bill to a MasterCard account. However, they don’t tell you what the new account number is. When you ask them what the account number is, they either don’t reply or do reply but don’t give you the information, instead asking you what you mean.

That is a pretty good metaphor for how the notification and implementation of 4th party implementations often work. In fact, that example is not the worst case scenario. In the worst case scenario, they agencies don’t specify the relationship before the campaign launches and only inform the publisher weeks or months later by disputing billing.

Imagine, that in the VISA / MasterCard example above, they waited until after the fact to let you know and told you that you had improperly paid your bill to the wrong account for months and informed you that you should have made payments to the MasterCard account, for which they still refuse to give you the account number. Again, as confused a situation as it sounds like, it is an accurate picture of the issue publishers are facing.

So what is the solution?

While there is no single solution to the issue there are a few decisions to be made and guidelines to be considered so publishers can at least feel they have done their due diligence and prepared themselves.

The first thing publishers should ask themselves is if they even want to accept these terms. Given the complication above, publishers may consider pushing back, or at the very least, setting some minimum standards for how it should be handled. But the situation is complicated enough that publishers should operate from a position of conditional acceptance on their terms, not unqualified obligation.

If publishers decide that they are going to accept fourth party terms and do so with some conditions, there are a few things that should be high on their list.

Since the agencies create the relationships between the third and fourth party tracking, publishers should require that the agencies make that information available in a simple format. The best scenario would be that all fourth party tracking be embedded as either a direct call or a comment in the third party creative script, similar to the Eyewonder example above. This would have the advantage of being done once during setup and negating the need for follow-up communication. It would also be a permanent solution and even years later the tracking relationship could be investigated. Lastly, it would have the benefit of being part of the creative setup and as new creative assets are tracked they would have the solution built into them.

If a single step solution like the above can’t be achieved, then the agencies need to understand that they will need to provide the publishers some way of relating the third to fourth party tracking. A simple spreadsheet would suffice, but this is still not as good a solution as the embedded solution above, since that information will need to be communicated and managed throughout the life of the campaign and for some time afterward.

Not only do agencies need to supply the key to establishing the relationships, but they need to do it in a timely manner. How do you define timely? Before the placement goes live, since revealing the relationship afterward can severely limit the ability to adjust pacing and control delivery.

Fourth party tracking and billing of online advertising is complicated and requires the industry to either address that complication or resign itself to living with it. Ignoring the issues will not make them go away and while the upcoming IAB impression exchange may resolve some issues, it will certainly not be a silver bullet for fourth party ad tracking.