In the fast-paced world of digital advertising, efficient and effective communication between buyers, sellers, and intermediaries is crucial. IAB Tech Lab’s role is to pioneer initiatives that standardize aspects of programmatic advertising. Among these initiatives, the integration of standardized taxonomies into the OpenRTB (Real-Time Bidding) protocol stands out as a game-changer. By incorporating the Ad Product Taxonomy, Content Taxonomy, and Audience Taxonomy, IAB Tech Lab has created a framework that delivers immense value to publishers, brands, and ad tech companies while fostering greater ecosystem transparency and efficiency.
This post explores the concept of taxonomy, its critical role in programmatic advertising, and the specific business value offered by the IAB Tech Lab’s standardized taxonomies in the OpenRTB Standard.
What is a Taxonomy?
A taxonomy is a classification system that organizes data, concepts, or objects into structured categories, making them easier to identify and understand. These structured categorizations provide a universal “language” that ensures all parties in the digital advertising ecosystem can interpret and exchange the classification seamlessly.
Why Are Taxonomies Important?
Taxonomies serve several critical functions that extend beyond business objectives:
- Clarity and Consistency: In the absence of standardized taxonomies, different platforms might use inconsistent terms or definitions, creating inefficiencies and misunderstandings. Standard taxonomies ensure uniformity across the ecosystem.
- Data Interoperability: As programmatic advertising involves integrating data from diverse sources, taxonomies offer a consistent framework for aligning datasets. This reduces errors and improves decision-making.
- Scalability: Programmatic advertising thrives on scale. Taxonomies allow platforms to onboard new partners and inventory efficiently without a custom mapping for each integration.
- Compliance and Privacy: With the confluence of privacy regulations and significant signal loss in the ecosystem, accurate data categorization is essential for ensuring compliance. Taxonomies simplify the process of labeling and managing multiple kinds of information appropriately.
IAB Tech Lab’s Taxonomies in OpenRTB
The IAB Tech Lab provides a suite of taxonomies that are central to OpenRTB:
- The Content Taxonomy provides a common language that can be used when describing content or the aboutness of a webpage, application, or video. Typical uses of the content taxonomy are contextual targeting and brand safety.
- The Ad Product Taxonomy establishes a standardized nomenclature for describing the product or service being advertised within a creative unit. It aims to provide publishers with stronger signals to, 1) control the types of ads that are delivered via automated channels and, 2) measure the performance of those ads against internal KPIs.
- The Audience Taxonomy provides common nomenclature for audience segment names to improve comparability of data across different providers. It is a key element in IAB Tech Lab’s Data Transparency Standard, which facilitates consistent labeling of audience data by first-party and third-party sources. The Audience Taxonomy also provides a mechanism to make segmentation approaches much clearer (categorically) by introducing Tier 1 level labeling that designates whether the segment describes attributions that are demographic, interest-based, or purchase-intent based.
These taxonomies are integral to OpenRTB transactions, enabling efficient and transparent communication between demand-side platforms (DSPs), supply-side platforms (SSPs), and other participants in the ecosystem.
4 Reasons to adopt Standardized Taxonomies
1. Enhanced Targeting Capabilities
The Audience Taxonomy plays a pivotal role in allowing audience owners, publishers or otherwise, a standardized way to create and signal that a user has some attribute, but removing the requirement for every party in the supply chain to hold a matched user id.
The Content Taxonomy complements this by ensuring ads appear in the right context. For instance, a sports brand can confidently bid on inventory categorized under “Sports,” knowing it aligns with their audience and brand identity.
2. Improved Transparency and Trust
The Ad Product Taxonomy provides clarity about the product or service being advertised. This helps publishers ensure only ads for products they deem appropriate for their users show up on their inventory.
For publishers, the Content Taxonomy provides a way to showcase the quality and context of their inventory, improving buyer confidence. Standardized taxonomies remove ambiguity, building trust between buyers and sellers.
3. Streamlined Operations and Reduced Costs
Standardized taxonomies reduce the operational burden of reconciling disparate categorizations. For example, an SSP using the Ad Product Taxonomy doesn’t need to create custom mappings for each DSP integration.
For advertisers, this means campaigns can be set up faster and with fewer errors. These efficiencies translate into cost savings and quicker time to market.
4. Greater Interoperability Across Platforms
In a multi-channel, multi-device advertising landscape, interoperability is essential, and this is where Taxonomies can add the greatest value, in the same way that all Standards do. Without Standards every integration between partners in an ecosystem is unique, so the number of protocols needed increases exponentially with each new partner. With Standards in place the protocol stays the same for each added partner As a result publishers and ad tech platforms, adopting these taxonomies significantly reduce friction when onboarding new partners, creating a more scalable and interconnected ecosystem.
Broader Benefits of Standardized Taxonomies
Beyond direct business outcomes, standardized taxonomies foster:
- Innovation: By eliminating the complexity of reconciling inconsistent data, taxonomies free up resources for developing new ad formats, targeting methods, and measurement tools.
- Ecosystem Growth: Small and emerging players can integrate more easily into the ecosystem when they have access to clear, standardized frameworks. This democratizes programmatic advertising and drives competition.
- Improved User Experience: Precise targeting through the Audience Taxonomy and contextual alignment via the Content Taxonomy lead to more relevant ads for consumers. Last, using the Ad Product Taxonomy helps publishers avoid overblocking whole categories of ads while simultaneously ensuring the ads that do show up on their inventory are appropriate for their user base. This reduces ad fatigue and enhances engagement.
How different industry stakeholders use Taxonomies
The IAB Tech Lab’s Ad Product, Content, and Audience Taxonomies,used in conjunction with the OpenRTB Standard, are foundational to creating a more efficient, transparent, and scalable digital advertising ecosystem. These taxonomies enable streamlined operations and increased transparency, while fostering innovation and ecosystem growth, across the ecosystem.
- Publishers: By using the Content Taxonomy, publishers can label their inventory accurately, increasing its discoverability and value to buyers. For example, a news publisher can segment inventory into “Breaking News,” “Finance,” and “Entertainment,” enabling more relevant ad placements The Ad Product Taxonomy is also critical for ensuring that ads do not get blocked and to define categories of ads they do not accept. Finally, the Audience Taxonomy enables Publishers to label their audience to make it easier for buyers to purchase
- Advertisers: For advertisers, the Audience Taxonomy provides a reliable way to reach specific user groups across different platforms. This consistency is vital for maintaining campaign integrity in a fragmented ecosystem. Advertisers will use the Ad Product Taxonomy to label their creative appropriately for the category falls into
- Ad Tech Companies: Platforms leveraging the Ad Product Taxonomy and Content Taxonomy benefit from streamlined integrations and reduced operational overhead, allowing them to focus on innovation and growth
By adopting these standardized frameworks, publishers, brands, and ad tech companies can unlock new opportunities and drive more value from their programmatic investments. The IAB Tech Lab continues to lead the way in shaping a unified, future-proof advertising ecosystem that benefits all stakeholders—while ensuring better outcomes for consumers and advertisers alike, and providing enough fidelity to mitigate risk and significantly lowering operational costs.
Barnaby Edwards
Sr Director, Product Marketing
IAB Tech Lab