Can the Ad Industry Justify the Use of Programmatic Buying?

By December 28, 2021 January 4th, 2022 AdTech, Brand Safety, Programmatic Buying

ANA Study on ProgrammaticWhich of the following two statements do you find most surprising:

  1. Only 30 cents of every dollar an advertiser invests programmatically reaches the consumer.
  2. More than 8 out of every 10 U.S. marketers use programmatic technology to purchase media.

The Association of National Advertisers (ANA) indicated that global programmatic spending “is on track to exceed $200 billion” this year. Further, it noted that PwC estimated that “more than 70% “of a typical advertiser’s budget “does not result in media that reaches the end consumer.”

Where does the money go you ask? According to the ANA the shortfall “factors in ad fees, fraud, non-viewable impressions, non-brand-safe placements and unknown allocations.”

These findings should do little to inspire confidence within the C-suite of any advertiser organization. The alarm bells should be going off when one considers that more than 50% of an advertiser’s spending goes to digital media and that the majority of that is purchased programmatically. Add in the growing percentage of TV, radio and out-of-home advertising being purchased programmatically and the level of working media for most advertisers is seriously compromised.

Thus, while we applaud the ANA’s recently announced initiative to engage PwC, Kroll, and Trustworthy Accountability Group (TAG) to conduct an in-depth study of the “programmatic buying ecosystem” we continue to have reservations.

The reason for our apprehension? The lack of meaningful progress that followed the findings of the ANA’s 2016 study of “Media Transparency in the U.S. Advertising Industry.” This combined with the fact that advertisers continue to allocate a greater share of their ad budget to sectors of the media marketplace that are fraught with non-transparency and brand safety challenges, fraudulent activity and where intermediaries tack on fees that seriously dilute an advertiser’s investment.

We understand that the advertising marketplace is complex and rapidly changing. But there is no rationale for money being siphoned away from exposing an advertiser’s message to consumers.

It is our belief that the quickest way to address these challenges is for advertisers to publicly announce that they will be curtailing their programmatic ad spending until the requisite safety measures and processes are in place to safeguard their investment. Then, and only then, will media ownership groups, ad technology providers and media service agencies get serious about eliminating waste and improving efficiencies. In the words of the 18th century French writer, Voltaire:

“When it is a question of money, everybody is of the same religion.”

At a minimum, as good measure to vouch for the funds already invested, advertisers may want to seriously consider a combination of financial and media performance audits to fully understand how their advertising investments are being managed.

Author Cliff Campeau

More posts by Cliff Campeau

Leave a Reply