Commentary
Lots Of Losers In An Opaque CTV Ad World
- by Dave Morgan , Featured Contributor, August 17, 2023
The following was previously published in an earlier edition of Media Insider.
Yes, I am going to hammer away at the transparency issue again this week.
If we as an industry have any takeaways from the recent press surrounding the Adalytics research into Google YouTube campaigns and its findings that 80% of analyzed campaigns for 1,100 brands between 2020 and 2023 were delivered on non-conforming third-party sites, typically with sound off and not visible, it's that the programmatic digital ad industry has a transparency problem.
And just-released research from Association of National Advertisers’ shows that of the $88 billion that its members spent on programmatic advertising on over the past year, 23% of it was waste, with much of that going to “made-for-advertising” web properties that don’t have any organic content or audiences.
I am tired of people saying waste in advertising is just part of the industry and something that we should accept. No, we shouldn’t.
Let’s be clear, this “waste” is a feature of these systems, not a bug. The tens of billions of dollars of money being programmatically siphoned off the campaigns studied is neither accidental nor unavoidable.
People are stealing money to which they are not entitled. They are taking it away from publishers who deserve it. They are creating artificially low pricing in a market that undermines all who invest in doing things the right way. And they are cheating these advertisers and their investors who receive no return on these tens of billions.
And -- critically for all of us who care about this industry in which we work -- these practices are rewarding, institutionalizing and normalizing conduct and behaviors that should be punished and eliminated, not just seen as a “cost of doing business.”
Yes, this can be solved. Both Adalytics and the ANA team analyzed the ad logs from campaigns, a key truth-set that many DSPs and SSPs do not routinely release. This forces brands to buy blind, relying on verification firms to look out for them. Inextricably, none of them seemed to have either heard, seen or spoken of any evil done. Funny how that is.
Marketers need to demand log-level transparency. They need to care about where their ads are delivered. And, essentially, they must recognize that when they demand “cheaper CPMs” they are telegraphing buyers to dilute their buys with fake stuff and look the other way. It’s that simple. There is only so much real inventory to go around. The markets set prices for it. Hoping to find something dramatically cheaper means that you are begging for goods that are either illusory, fraudulent or likely “fell off the back of a truck.”
Let’s stop doing business that way. Tens of billions of dollars of legacy TV ad spend is shifting into CTV. Linear TV has problems, but transaction and inventory transparency isn’t one of them. Let’s not let that money coming into CTV advertising be wasted because we didn’t demand better of our industry.
What do you think? Are you ready to demand transparency?
Agree Dave! I am hopeful that the TrustNet and TAG certification is a step (not final) in the right direction to expose all costs and middle-man so buyers can make informed decisions about how and where to spend fees on these services.
We cannot accept that fraud or lack of transparency is acceptable and we really need to address this once and for call!
https://www.tagtoday.net/pressreleases/tag-announces-first-companies-to-earn-certified-for-transparency-seal-for-adopting-log-level-transparency-framework
People have been demanding transparency for 20 years and yet here we are. It's frustrating because the ad fruadsters are like hackers, always one step ahead of any counter-measures. I welcome transparency and hope some meaningful solutions bear fruit in the next few years.
Dave, I'll bet that very large percentage of the "wasted" programmatic ad dollars comes from a combination of advertiser types that just don't care or are too ignorant about media to know better. I'm referring to search and direct response advertisers who usually pay only when a user clicks through to their website and the many local marketers who operate without an agency that is skilled in dealing with the media---or don't even have an agency----just someone who makes their ads for them. Also, I'd bet that a high percentage of the "wasted" ad dollars come from sales promotional ---not national branding---budgets. Here, different rules may apply when it comes to monitoring media, making sure that you get what you you bought, etc.
But what about the other type of advertiser---the TV- savvy, national branding marketer---the P&Gs, General Motors, Krafts, etc. of the advertising world. Their brands are headed by CMOs who have media directors and staffs under them and work with professional media agencies who know what's needed to ensure that the "waste" you describe doesn't take place. How much of the programmatic "waste" can be attributed to them?I'll bet that it's not very much.
I think that it's time we start zooming in on whose dollars are being wasted and why this is so, instead off wringing our hands and clamoring for some industry-wide magical solution. It's probably not coming as the fraudsters certainly wont cooperate and many of the advertisers they are swindling don't seem to care---- or operate on systems where it doesn't necessarily matter so long as they get results and their buys pay out.
In short, if you really want reform---and it's certainly needed---focus on those who should care and have the resources plus the knowledge to do something about---that's not going to be everybody. Indeed, it may well be a minority. But if these lead the way, perhaps the others may follow suit---or the programmitic and ad distribution folks, themselves, will feel obliged to modify their systems to clean up the mess.
Insightful and scary for those of us who want to see a true ROI of our digital/CTV placement. It makes you think, about why I'm placing this. Maybe it's time for a "back to the basics" approach.
Ed, from what I read about the Adalytics study, many large advertisers are named as losing large amounts of money to these fraudsters. When there is a lack of transparency, and/or reliance on logs provided by even large operators as Google, that means lack of transparency for all, including the biggies. The stories I read, including last year's Gannett fiasco, don't give big advertisers, agencies or operators a pass here. Sometimes size is problematic. You have to place large amounts of clients money someplace in a short period of time. -- and don't have the time to check carefully before or during the campaign. Do you look after? Maybe. Now you may be right that the big spenders know how to get around these issues. If there is reliable evidence that this is so, I haven't seen it.
Jack, my point about those large, TV- savvy, advertisers is that their branding people as well as the media agencies that work on national TV campaigns, have the knowledge to pressure the CTV programmatic people as well as the time sellers to deal with the problem. I also pointed out that much of the spend that is at issue may not be branding dollars but sales promotional dollars---even though the same companies are involved. The sales promotional people go in mainly for quick fix results and may not know---or care---- so much about some of the problems that concern us.In any event, I think that we are whistling in the wind on this until we get a lot more specific about who is making what mistakes and why this is happening. Only then can those who care---or might care---- decide whether to take action about it.
Those branding people and media savvy folks may or may not know what is required, or may not have the clout required, or may not want to step out of their lane for any number of reasons. The point is they have not been immune and are victims just like the smaller folks, despite their resources. Moreover, with the decimation of research and analytics staffing to cut costs, they may not be there at all. Where we agree is that if anyone has the clout, it's them, but they account for a much smaller proportion of revenue to the likes of Google and Facebook than Disney or NBCU. What needs to be done is to insist on transparency, independent metrics, and eliminate self grading. How that comes about has eluded many minds, including mine.