The current programmatic media ecosystem is “rife with
waste” to the tune of $13 billion and maybe as much $20 billion according to a new study by the Association of National Advertisers.
The organization issued what it called a
“first look” today of a more in-depth study that will be issued later this year.
And the report lays much of the blame for inefficiencies in the programmatic arena on the advertisers that
utilize it, saying that they too often put cost ahead of value and more generally fail to exercise proper stewardship over investments in the space.
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The report cites so-called “made for
advertising” websites which it asserts account for 15% of the current $88 billion open programmatic web market, which the study focused on and which accounts for about 17% of the digital ad
market. Such websites, per the report usually feature low-quality content including fake news and conspiracy theories. Such sites are also rife with links to spam, pop-up ads and other intrusive
formats to maximize revenue.
According to the report, the average campaign runs on 44,000 websites, which by definition is wasteful. “Advertisers can reach 95% of
audiences using a few hundred websites.”
Another big problem is a lack of data, often driven by the fact that advertisers often don’t demand specific data rights in their buying
contracts. Without better information, advertisers often overpay for inventory.
The methodology for the report illustrates part of the problem. Sixty-seven ANA member companies volunteered to
participate in the study but only 21 ultimately were able to do so. The 46 others were blocked by their contracts or other hurdles from getting access to log data from DSPs, SSPs and ad verification
providers. The log level data, upon which the report is based, includes a detailed record of everything about an impression obtained from the tech vendor involved in a programmatic transaction.
One key issue for programmatic buyers—know if their agencies are acting as principals or agents. Principals don’t have to act in
the best interests of buyers unless specific contractual language requires them to do so. Agents must legally do so, per the report.
Among the recommendations:
Advertisers must be more active stewards of their media investments.
Marketers need direct data access contracts with all primary supply partners, including DSPs, SSPs and ad verification vendors.
Create agency partnerships that provide complete access to data and full transparency of websites purchased on media buys.
Eliminate most MFA websites from media buys and prioritize viewable, fraud free and brand safe programmatic buys.
The second phase of
the report will dive deeper into the programmatic media supply chain and tackle subjects such as cost waterfalls, media cost analysis, and ad quality (specifically viewability and fraud). The
complete report will be issued in the next few months along with a “handbook” that will provide explicit guidance for marketers to better navigate the programmatic media supply
chain.
The ANA worked with several outside companies on the report including:
PwC US who supported the study with its Media Intelligence
platform to ingest and analyze log data.
TAG TrustNet, an industry initiative to drive transparency, accountability, and efficiency across the digital advertising industry with a
technology platform enabling deterministic matching of impression LLD.
Kroll, a provider of services and digital products related to valuation, governance, risk, and transparency, served as the
investigative/qualitative research partner.