Tag Archives: DSP

Exchangewire: The Burden of Ad Fraud falls on all of us

I am passionate about how we cannot let this scycle of ever decreasing cpms continue and I lay the blame at all our doors, agencies, advertisers and auditors. Exchangewire covers this topic with contributions from me. Original article here.

Click fraud has undoubtedly been one of the topics of conversation in the programmatic advertising sector in 2014, with Google’s purchase of UK-based security specialist Spider.io just one of a number of industry moves underlying its growing importance.

Last week Rocket Fuel was fingered in a FT article highlighting its prevalence in the industry (of course it was quick to rebuff the article’s assertions), but the entire advertising – from client-side marketer to third-party ad tech vendor – must accept their role to play in allowing it to continue.

This comes on the back of other articles in mainstream press – for instance a Wall Street Journal article claiming that up to a third of all web traffic is “bogus” – pressing the issue further for the online advertising sector to improve transparency over media buys taking place via automated channels.

Industry-wide measures
Moves to tackle the issue of click fraud (or bot traffic) began to gather pace last year when the IAB’s US chapter established the Traffic of Good Intent (TOGI) Task Force, in a move demonstrating that programmatic ‘media trading’ sector was maturing as braces itself to become a mainstream player, as opposed to an emergent force.

In fact during the last two weeks alone Dstillery announced it was received a patent for its fraud detection technology from the US Patent Office, this follows the news that the similarly named Distil Networks’ bagged $10m in Series A funding just last week.

More recently, the Alliance for Audited Media (formerly the Audit Bureau of Circulations) announced it was absorbing fellow auditing service ImServices.

So while it is clear that there is a near universal intention to wipe out such practices, but it’s probable that the fraudsters will always be on step ahead of the industry’s security brigade byinventing new ways to game the system (some fraudster techniques are quite comprehensively discussed here).

How can individual parties minimise the impact of click fraud?
But that’s not to say that measures cannot be taken to minimise the impact of online ad fraud, and with this in mind, every tier of the industry has to take their share of the blame in letting this happen.

As discussed in previous articles in ExchangeWire everybody has their part to play in minimising the detrimental effects of elements of the ‘bad internet’, and if parties are proactively taking measures to improve things, then they’re part of the problem.

Speaking previously with ExchangeWire Dr. Thomas Servatius, IPONWEB, head of client services, identified that the rise of the programmatic industry had allowed fraudsters to thrive online, with the scale of web traffic allowing rogue players to put sites which generate traffic by non-human means on ad exchanges.

“The problem is that when an advertiser buys traffic on a fraud site, it usually comes very cheap – much cheaper than human built sites [thus opening the opportunity for arbitrage from third-party players and media agencies] – and it has good click through rates.

“So if you have fraud in your advertising mix, what you see as an advertiser is that for a small amount of money, you get a good number of clicks,” he explained.

Explore what will KPI’s look like in a post-click fraud market?
He went on to further relay anecdotal evidence of the internal dynamics that encourage brand-side marketers (the people who are ultimately being ripped off here), from concealing the issue.

Indeed Cameron Hulett, Undertone, executive director, EMEA, further explains that such is the scale of the problem that most campaign benchmarks after a “post click fraud market correction” would be largely redundant.

For instance, most marketing KPIs, such as reach and traffic are drastically inflated by bogus web traffic as it currently stands, causing problems for parties on both the buy- and sell-side alike, contends Hulett.

Hence, it is in the interests of a lot of parities to let this white elephant in the room to go unaddressed, according to some.

Prioritise quality over cost-cutting
Marco Bertozzi, President Audience On Demand EMEA and North American Client Services at VivaKi, argues that the entire industry is incentivised to prioritise lower CPMs (ergo poorer quality inventory, or even bot traffic through long-tail exchanges and networks) instead of quality content (where prices are higher).

“I think educating marketers on the importance of paying more for quality inventory will need to happen because the buy and the sell side are chasing KPIs determined by said client who may be calling for lower CPMs versus quality interactions,” he says.

“If the only metric focused on by auditors and advertisers is lower cpm, then that’s where everyone will focus – turning a blind eye to the lack of quality and transparency but being happy that a lower CPM was achieved.”

Auditing has not kept up with the pace of change in the Ad Tech space. The industry still clings to CPMs and not the value of the impression and what it can deliver, according to Bertozzi.

“If you look at Search, if standard auditing metrics had been applied to search advertisers would not use it and spend would be non existent as agencies would be told to suppress the CPC. The same now applies to display, it is an auction environment and yet still they want to drive down on cpm,” he adds.

Explore alternatives to CPM pricing and last-click attribution
Meanwhile, Julia Smith , a partner at consultancy firm 614 group, and acting MD of Evolve Media, argues that exploring alternative pricing models to selling media on a CPM basis, can make it easier for advertisers and their security partners to detect non-human generated traffic.

“A lot of people are all about the click, and in particular its a problem with the long-tail of sites [meaning non-premium ad networks and exchanges are a particular problem in this regard].

“We can start looking at alternative Using a cost-per-engagement [pricing] model could play an important role in combatting this. While it’s not perfect it can make it harder for click farms to replicate human behaviour.”

However, as mentioned earlier in this piece, fraudsters are just as industrious in their attempts to stay ahead of the security elements of the ad tech industry, with their techniques growing evermore sophisticated.

Sources consulted by ExchangeWire also argued that one fundamental flaw in the ad tech sector that lets poor quality traffic be traded on ad exchanges and networks is the prevalence of the last—click attribution model , which incentivises the entire industry to chase the last click.

Adit Abhyankar, Visual IQ, executive director, says: “Incentives drive behaviour. this is common sense. So if flawed attribution leads to flawed allocation of performance credit, which then leads to incorrect incentives, you can bank on the fact that, it will also lead to bad decisions.”

Meanwhile, Marco Ricci, Adloox CEO of content verification firm Adloox, argues that looking at at specific domains on ad exchanges and networks, for statistics such as CTR per domain and by publisher, is a more sophisticated method of detecting bot traffic.

AOD’s Bertozzi adds: “Attribution, econometrics, understanding business impact will all go a long way to removing an obsession on lowest cpm. It will also focus on the fact that advertisers should be challenging media partners to show where they are advertising line by line. If you have to be transparent about the media placement, you are less likely to buy the long tail.”

Employing sophisticated vetting techniques
Those ad tech players looking to perform blacklists [of sites that are known to have traffic generated by non-human traffic] should perform check such as clickthrough rate (CTR) per domain and by publisher, CTR vs conversions, and CTR vs IP addressees are all useful metrics, according to Ricci.

“We check clicks made in less than one or two seconds we can catch fraud – blink and you’ll miss it. Essentially our clients want a more granular level of transparency than the majority of the market offerings today.”

Bertozzi also argues that those players on the buy-side need to do more to improve the reputation of the sector. He adds: “We provide a rigorous vetting process called VivaKi Verified, which thoroughly evaluates media, data and tech partners to ensure that they meet our standards when it comes to brand safety, consumer privacy and client data protection.

“Rather than buy in the murky pool, we use means to avoid the problems, don’t buy in the murky pool at all.

“We have also a proprietary Quality Index that combines the [safety] signals from partners like comScore, Google, Integral Ad Science and Vindico to all the URLs we have in the AOD marketplace creating our own score.

“Metrics and standards aren’t there yet and adoption needs to happen on a larger scale, but the cost of viewable ad impressions will go up and we need to be prepared to pay them to ensure that better brand-to-consumer interactions are happening. If the only metric is cpm, we are opening up the business to gaming the system.”

So the fact is, regardless of which statistics parties in the ad tech industry subscribe to, as to the extent of the problems of bot traffic, it remains clear that more can be done to address the issues of click fraud.

Those that choose to ignore the problem (for whatever means), are helping to propagate it.

 
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Digiday Post : The Ad Tech threat agencies need to take seriously

My piece on Digiday outlining the threat of Ad tech disintermediation. First posted here.

I remember sitting with a founder of a well-known demand-side platform a few years back (feels like a lifetime), and he was warning me how the evil Google would disintermediate us all and destroy the agency trading desk business if we were not careful.

The irony now is that the worst culprits of all are the new, up-and-coming tech vendors who are chasing the direct-to-advertiser relationship at any cost.

As an agency, allowing a DSP or real-time bidding ad network to control all the programmatic spend may seem the same as giving an insertion order to an ad network, but it is far from that. The rules have changed with the rise of ad tech. Our whole business is based more and more on data. We need to manage, explore, test and learn with data, and the data needs to be held at the hands of the agency running the wider business, or remain in the advertiser’s hands should they choose to take the process in-house.

To release tens of millions of dollars to a managed service DSP is to release all of your intellectual capital to an external company where the same rules expected of an agency may or may not apply. We see clear benefits when we are able to apply the agency learnings to all the programmatic opportunities. Whether we are looking at cross-channel attribution, econometric modeling or online and offline synchronization of media spend, we can make activity work so much harder in that context — and tie it back to the advertiser’s own data whether on or offline. A third party, or siloed business, simply cannot do the same.

Agencies take heed: This is no longer just a question of outsourcing some digital buying but rather the outsourcing of your agency role and intellect to a third party. You may not recognize the danger, given the modest level of programmatic spend relative to massive TV budgets. But when this spend drifts away, a little bit of control goes with it. Not a good situation given the projected growth of programmatic.

Take a lesson from search. Two things happened in search that made it one of the biggest battle grounds of the agency world through the mid-2000s. The first was that the agencies ignored it when it launched, and the second was they fought tooth and nail to get it pulled back into the agency when it had grown into the mammoth beast that it is today. Today’s DSPs are yesterdays search villains.

An agency digital lead should fight to keep the programmatic business close. Yes, I am biased toward a relationship with an agency trading desk — not just because data-driven, programmatic buying will be the lifeblood of the future media agencies but also because the right agency/trading desk relationship is better for clients.

An advertiser might be attracted to cheaper options. A siloed, third-party provider might “feel” unbiased. But what happens when the market moves (which is does every day), and that marketer is tied to a single provider. They move at the the speed of the provider. Or they pay the significant switching cost. Yes, DSP technology evolves. But their lack of access to the ideal marketplaces may leave an advertiser handicapped. And how will the marketer know? It’s hard to measure performance without any comparison or opportunity to swap (short of making an extensive investment).

The agency relationship should give clients cross-platform, open access to all opportunities — and objectivity. Trading desks should deliver the benefits of relationships, learnings and experience with all of the best DSPs, plus perpetual evaluations of new and evolving partners. They must be able to provide the brand safety, starting with basics like full disclosure on where ads are appearing and how much of your budget was spent on media. It is fascinating to me that Rocketfuel discloses 60 percent margins and there are no concerned glances from advertisers. Really? 60 percent?

I have been warned all my life that Google is the bad guy, but it is becoming clear that as the story unfolds, we are seeing a very different picture. The VC-fueled pressure cooker we are in at the moment is creating disintermediation on a grand scale or at least the potential of it. And agencies and advertisers should both see that there is a major role for their partners in helping them steer through this time so that we don’t walk blindly into a repeat of 2001-2008, an era that both agencies and advertisers regretted longer term.

 

‘The Motorola Dynatac 800x – The whole was far greater than the sum of its parts

An excellent guest blog from Danny Hopwood – Director of Product AOD UK on Exchangewire mobile evolution

In 2011, mobile saw spend reach $3.9 billion globally and 2012 is expected to hit $6.2 billion. “This is the year of mobile,” most will say. It is here – and I think everyone may have felt a little underwhelmed by it.

There hasn’t been a massive parade, no free USB sticks shaped like an iPhone, and certainly no trophy taking the shape of a gold encrusted Motorola Dynatac 8000x (made famous by Gordon Gekko) engraved with “we did it”. Furthermore, mobile spend didn’t overtake TV spend.

However we have seen HTML5 become more important and we have seen businesses built around mobile, ad networks open up mobile inventory, DSP’s for mobile specifically come into existence, such as Strike Ad, and VC investors say, “I need a mobile start-up – stat!” CB Insights confirmed that it has reported on 102 mobile VC deals in 2011, and within those, any company with a photo or video-focus saw up to 30% of those deals.

It’s been a pretty exciting few months. Technology continues to develop and proliferate, with the likes of NFC (Near Field Communication) and 5G testing. Adfonic’s second quarter AdMetrics report shows that iOS saw its market SOV decrease from 45% in Q1 to 34% in Q2, whilst Android’s share increased from 38% to 46% over the same period. UDID’s are no more on iOS, and it looks as though Apple will roll out their own tracking tool. Cookies probably won’t come to mobile in the way we imagine for Android, or other devices for that matter. Fingerprinting scares me, as there still seems to be no regulatory authority behind it and no one seems to want to step up to the plate. There have been a number of articles highlighting both the benefits and the concerns around device fingerprinting. If you’re not familiar with fingerprinting, it’s a process in which a user’s device settings are collated and then assigned a unique ID – much like a cookie – to use for tracking purposes. These settings can range from brightness settings to browser settings, time zone and fonts. It requires many more data points and therefore is not as easy for the consumer to opt out of. Until we see a regulatory company behind device fingerprinting I don’t believe it will get the seal of approval from the wider industry.

I feel mobile has a lot of potential, and I don’t think we have even scratched the surface yet. Currently mobile is simple, it’s certainly the way I speak about mobile within AOD. We keep it simple because it is.

I hear all sorts of industry “fixes” to solve areas of retargeting. For example, one solution making the rounds at the moment is to merge various different tracking systems like UDID and cookies (on available devices), fingerprinting, ad server log files and campaign data to give a nearly accurate view of a user across devices. This is an example of great innovation, but also potentially another layer of danger to privacy and it’s not reliable enough. What if UDID is removed from the rest of the platforms and cookies follow suit? The fixes don’t have enough longevity to provide reliability.

This highlights my qualms with mobile. Despite achieving a sustainable mobile market in terms of spend; we haven’t quite achieved what mobile is really capable of achieving. I say we, because I think it’s important everyone realises no one tech provider, or genius in a basement, is going to solve this for us.

Mobile, though, can be activated at scale, delivering performance and acting as extensions to your campaigns. We do have to be honest on its capabilities presently and stop trying to complicate it. If someone were to be dedicated enough to read five articles on mobile, it would become apparent very quickly that mobile is simple.
AOD was the first agency trading desk to launch mobile, and we see it working incredibly well, but I can see what else it could do if it had the component parts. I think there are four ways to solve these issues:

Formats
Formats are still pretty limited on RTB mobile for now (300×250, 320×50, 468×60, 728×90). Some vendors have more, but if you want scale you have to go for the lowest common denominator. They do the job, but I think they need to be able to do more. HTML5 will help to answer this, but I still see creative agencies sending over flash files hindering the adoption of HTML5.

Digital Creative Houses
On the topic of HTML5, I hope we see more companies like SOMO (Gareth Davies of SOMO recently wrote a piece on mobile), Sencha’s HTML5 tools, the IAB’s ORMMA and MRAID projects and Celtra. These companies will speed up HTML5 adoption and clients’ mobile understanding.

I can’t help but think that if a creative agency wanted to revolutionise themselves and start with a great initial footing in the market they would opt for HTML5 only; ensuring they spread the message to all clients, agencies and publishers of the benefits. It might be hard initially, but you could see the long-term benefits in being the first creative outfit to do it and commit to it.

Client/Advertiser Adoption
A more powerful and easier route of HTML5 adoption would be if it came from the clients themselves. They need to take the plunge, it’s not even a plunge it’s a big fluffy mattress of improved creative output, design flexibility, richer executions and easier implementation. You can still back it up with Flash, but a mobile creative in HTML5 is going to start to make this industry push the boundaries and innovate on what we have already done. I have seen this start to happen, and quite recently helped a client to holistically adopt HTML5 for all their online activity.

We Are Going to Have to Make This Market
Mobile advertising was supposed to provide a connection to that constant consumer companion. Many will say it does and that their technology can pin-point users to five metres away. I believe the only ones that can do this are the carriers within their respective countries. I’m not aware of carriers that have been doing this, but I hope they do. This is the “we” part of my earlier point. There are many stakeholders in this industry who all hold very important parts to the mobile market. These stakeholders take shape in advertisers, agencies, publishers, carriers and technology companies.

Each one of these stakeholders is trying to carve out their own piece of the pie. They have a right to as they got to the solution more quickly than others, but they only have the solution for their specialism. I don’t expect O2/Vodafone/T-Mobile to come up with a DSP. I expect them to find a solution to allow their carrier GPS signals to be used for geo-targeting, within another DSP in real time.

I also don’t expect publishers to make mobile inventory available at cheap prices through RTB. I expect them to make it a profitable revenue stream for themselves, but also to help rectify the issues with targeting that mobile currently has. They are in an advantageous position to help; they just need to start focusing on it. I am in no way belittling what innovation has already been accomplished by many publishers; I just know there is much more to be done.

On the tech side of industry, I think it’s a bit cloak and dagger. Platforms are everywhere and everyone can do everything – but we all know what is possible and what is achievable with the current state of technology and infrastructure. We need to demystify the market and start to talk honestly about what is and isn’t possible. My favourite example at the moment is geo-fencing. geo-fencing is only possible with a Wi-Fi connection, and even then, accuracy diminishes the further the device is from the Wi-Fi spot. To my knowledge, latest figures pinned Wi-Fi penetration at 73% of all UK households. Fantastic! It’s growing and it’s in the household, but what use is a Wi-Fi connection for local targeting to the mobile advertising market if someone is sitting at home on the internet? So when a vendor is asked if they can geo-fence, they will say “yes”, but they need to be honest that is based on Wi-Fi coverage that is household-based and not carrier networks.

We need this level of penetration on a street level while users are outside of their homes. Admittedly, the Olympics forced the UK’s hand, and the resultant underground Wi-Fi project at least begins to bring this to stations, but it’s still not street level.

Companies within our industry, and probably more outside of it, have these answers and these capabilities. We just need to start working together to join them up. O2/T-Mobile/Vodafone could open up their GPS signals to a DSP, publishers could pass more information on registration data or location in the bid request. We could remove the need for the cookie and fingerprinting all together on mobile!

It might be too much to expect from the mobile market, and I’ll admit I’m glossing over a few big questions around businesses, allowing their specialisms to become part of something else.

I am not ignoring areas like privacy or consumer consent, far from it; it’s only with agreement on what the potential of this market is, when all the components come together, that we can answer this subject.

The Motorola Dynatac 8000x had many components to it, but the whole was far greater than the sum of its parts. I think we could learn a lot from this logic. Motorola did, and launched the first commercial mobile. I believe that if we got our collective heads, and our businesses, together we could do the same for mobile, and have a gold encrusted Motorola Dynatac 8000x with “we did it” engraved on it.

Dataxu buys Mexad – Mathmen just went back to Madmen

I quietly smiled to myself when I saw the announcement that Dataxu had bought Mexad and the press release that went with it. Dataxu buys Mexad. What an interesting start to the year in terms of consolidation.  I have had relations with both companies and in both situations I / we were criticised by the companies involved for our strategy. In both cases it boiled down to driving business growth through good old fashion means rather than selling the algorithm dream.

Dataxu first of all was very down on the VivaKi partnership with Google and Invite, first was the usual Google paranoia stuff which I am used to and bored of but the second was whether or not we could succeed by using Invite, considered the lesser DSP apparently by Dataxu compared to their high tech operation.  At the time I explained that to grow the marketplace and to grow my business and make a success of Audience On Demand first and foremost was to have the support of a strong partner (and a good one) with resources and scale not just in EMEA but globally. Secondly I needed consistency of offer, the finer points of the algorithm would not be the defining factor. Audience On Demand a year later is the largest Exchange Trading proposition in the world and we are delivering fantastic results and have some very smart people working for us so I feel pretty vindicated in my approach. It is therefore enlightening to now see Dataxu resort to buying Mexad to be able to deliver service and people.

Mike quotes ‘“feet-on-the-street” is becoming a key differentiator for the DSP business, because it’s not just about having the best software, algorithms and access to RTB inventory that determines success in local markets, but understanding local cultures, ways of doing business in specific markets, and the ability to advise and service local marketers and agencies in those markets.

This is exactly what I was explaining all those months ago and it seems Dataxu have also seen some truth in that approach.  The other telling thing for me is around the fact that the individual DSPs are finding it hard to get into the agency groups, they have been knocking on the door for some time and the way is blocked for many of them with Invite taking the lion’s share and each of the others taking the smaller share, at least in EMEA.  I have said all along that I still see this a very difficult market place for the independent DSPs, not impossible of course and I look forward to working with a number of them as we continue to test and learn, but difficult. Perhaps by buying Mexad they see a quicker way of getting through the doors, although Mexad as far as an agency trading desk is concerned is like outsourcing your TV buying so I suspect those doors, at least in developed markets, will also start to close.

Finally Mexad. I assume that even though they have been bought by Dataxu they will continue to work with multiple DSPs? I have been repeatedly heckled at industry events that working with just one is wrong and is not the way forward, that it is a flawed approach!  Anyone who knows how agency land works knows that it is a large education piece and consistency of message is crucial. Audience On Demand is working well because the agency teams understand it, the publishers know we are transparent and consistent and the clients have a team of people who are aligned and focused only on delivering the best results. Perhaps Mexad will find some of the same benefits now it can concentrate on one DSP only.

This world will evolve of course and Audience On Demand will test a number of different DSPs over time, that is what any desk would expect to do, even if we retain a major partner, I hope now that Mexad is tied down to just one they wont find it too strategically difficult to handle after claiming for months that it was the wrong approach!

Aside from that Good luck to all parties and well done!

Exchangewire Ad summit 2010

So how do I feel after the largest gathering of Ad exchange professionals ever collated? I feel like we collected the largest group of ad exchange professionals all together and generally made ourselves feel better that we are part of something big and we made some great contacts. What I don’t feel is that we extended our reach beyond that room, and actually that would have been the best outcome of today. it’s a small thing but there were virtually no tweets, no coverage, nothing that seemed to extend beyond the room which is a shame, lets hope the attendees talk about the day.

Today was the inner sanctum, you could use all the phrases and acronyms that you liked today – DSP / SSP / Adexchange / Adnetwork / data etc without feeling like someone would not understand, and I think that’s fine, but what we need is amplification and understanding. I would have liked to have seen some more clients there, where were they? The agency folk were slim on the ground a smattering from Vivaki, Carat, Infectious, Mediacom but not many and none brought clients. It was a technology / supplyside gathering in the main.

What I wanted to see was a few clients and more mainstream agency folk to come and see what it was all about, see what it all meant and how it would affect them. I was asked to come up and co present with the Global CEO of Vivaki Nerve Center and I talked about my disappointment that the NMA had hardly bothered to talk about exchange trading in a recent issue and thats how I feel the industry is in general. It’s interesting because it appears no one has learned anything from the birth of search, ie we should have all embraced it quicker and we should have wanted to know more sooner, it feels like it’s happening again.

Of the content Admeld, Quantcast, Vivaki, Infectious, Google, Rubicon all contributed amongst others to an interesting session, the discussions around data and the demand side seemed to raise the most passions as people grapple with who owns what, who does what and who is going lose the most in the new world. Overall it was strong content, perhaps needed more direction and linkage but strong nevertheless, as I say, it was like preaching Catholicism to the Vatican, I would rather be in front of a crowd of non believers!

Credit to Ciaran for organising this, it takes some balls to get these things going and he did a great job, I hope for the next one there is a push to bring people from outside of the Lodge and bring in non believers, clients, broader agency people so we can spread the word. Today we established a real crop of experts in one room and that is a great start, on to the next..well done Ciaran.

Ad exchange development mirrors that of paid search

Marco Bertozzi: 08:03:2010
The battle for the ‘ad exchange’ dollar is hotting up. It reminds me of how things were with search. It crept up on people / media agencies and before they knew it the specialists were doing well and making good money and winning pitch after pitch in the specialist area.

As it went on we debated whether search was specialist or should be just another channel forming part of an everyday media plan and finally we ended up with a couple of serious search independent players and the main agency groups pretty much on top of things and integrating and coordinating search into wider marketing plans.

Here we go again! Anyone who went through that must be getting a sense of Deja Vu. Everyone is talking about Ad Exchanges and DSP’s, the specialists are springing up and making hay and claiming they are the only ones who know how to do it. The debates rage around best practice and who has the biggest and best capability, its an incredibly similar scenario – does anyone else feel it?

The big difference this time is the agency groups to a greater or lesser extent saw it coming and started to gear up for it, as you can imagine I am biased in that area as to who has done it best to date but in a way that’s irrelevant, the point is the people in the know in agencies are all working towards this revolution. It will be a revolution, it is the next phase in media communications and those that ignore this will be looking as silly as those that thought search was a fad. This transition is moving so quickly though and only the brave will really make the most of this wave.

I am enjoying being part of this new wave of communications and trading and have been so impressed by the work that has gone on, this is exciting stuff and it is just going to explode.