I have written many columns about digital media transparency, and so have many others. The whole industry has been turned upside down by revelations about digital brand safety, ad transparency and ad fraud. The Association of National Advertisers, the World Federation of Advertisers, the Interactive Advertising Bureau and many other industry organizations have conferenced and argued on the topic. It has been a hot-button issue for at least five years.
And still, nothing has changed.
You may have heard about the dramatic and damning report from Incorporated Society of British Advertisers, the ANA’s counterpart in the United Kingdom, called “ISBA Programmatic Supply Chain Transparency Study, in association with the Association of Online Publishers (AOP) and PwC.” PwC collected data from 15 advertisers, eight agencies, five demand-side platforms (DSPs), six supply-side platforms (SSPs) and 12 publishers, offering an attempt at complete transparency of the programmatic food chain.
The conclusion is not pretty: The middlemen in the industry still eat up about half of dollars invested in programmatic, which is about the same number as was reported five years ago in a different study.
What's even worse is that 15% of budget disappears into what apparently is the first known manmade black hole. Or as ISBA puts it: “Taking other visible costs such as DSP/SSP fees and other technology costs, 15% of advertiser spend -- an ‘unknown delta,’ representing around one-third of supply chain costs -- could not be attributed.” Could. Not. Be. Attributed.
Sure, ad tech costs money. You have to build it and maintain it. You have to hire people and build systems and invent or license technology -- that's all fair. But at a cost of almost 50% of every dollar? And 15% disappears in such a confusion manner that even PwC, with full access to everything, cannot figure out where it is going, and who ends up with it?
On top of that, the 50% that does reach publishers sadly may not reach the actual publishers, and therefore actual consumer eyeballs. On March 27 of this year, Mediapost’s Advanced TV Insider Karlene Lukovitz reported on the latest ad scam, called “Monarch.” She writes, “In this one, the alleged scam -- in which Roku and premium publishers are again victims, not beneficiaries, stresses Pixalate -- exploited over a dozen Roku apps in an apparent scheme that appears to have OTT/CTV advertisers including political ad groups, luxury automakers and CPGs.”
So marketers thought they were buying premium, and therefore safe content, because of the name-brand publishers.
There are countless other examples where criminals did the same and scammed the digital ad industry out of billions of dollars.
What is the industry to do?
Stop buying through programmatic?
Put cash in envelops and bring it directly to publishers in person?
None of this will work, obviously. And I get that it is difficult to get outraged when COVID-19 eats up every minute of every day. It is hard to get angry when jobs are disappearing, budgets are frozen or cut, businesses are going bust, and we are nowhere near done with 2020 yet.
But think what would happen if advertisers could recoup half of the black hole? Or 30%? For now, the 15 advertisers participating in the ISBA study are probably actively doing just that. And so should you. Perhaps, a few jobs might be saved as a result -- because, rather than feeding a black hole, you could be paying a salary to someone who does actual work in the ad food chain.