15% of Programmatic Ad Spend Goes Unaccounted For

A few days ago, the Incorporated Society of British Advertisers released a Programmatic Supply Chain Study that should make advertisers really angry.

In this in-depth study (which builds on previous initiatives by the World Federation of Advertisers and the Association of National Advertisers), PwC mapped out all of the services and costs at each stage of the programmatic ad buying process. The intention was to provide a more transparent view of the supply chain. What they discovered sounds like downright fraud.

There were 15 advertisers in the study. We’re talking about brands you’ve heard of like PepsiCo, Nestlé, and Disney. There were also 8 agencies, 5 demand-side platforms, 6 supply-side platforms, and 12 publishers who participated.

Here’s the bottom line: the publisher receives only 51% of the advertiser spend. DSP/SSP fees and “other technology costs” were tracked but GET THIS: 15% of the advertiser spend is unaccounted for. ONE THIRD of supply chain costs are just BS. Just got sucked into some unknown place.

Maybe you’re thinking that this only happens to multi-billion dollar consumer brands, not those in the insurance industry. Maybe you’re even thinking, “Julie, calm down. You’re just bummed that the media is losing half of what the advertiser pays.” Oh yeah? I have first-hand knowledge of the following:

• A brand who believed they were on an insurance site because the agency’s programmatic ‘partner’ provided a photoshopped screen shot of them on the site. (They were getting such a good ‘deal’!)
• An agency whose ‘partner’ was sending blog visitors to a click farm from an insurance site on a completely unrelated site. Why? To make it appear they were doing a good job for the advertiser of course.

If you are only focused on clicks as your measure of success, and you’ve got a lot of middle-men doing things you don’t understand, you are likely to get burned.

In light of the study, the ISBA recommends a cross-industry taskforce and an independently-led effort to work on standardization and data sharing.

I have a better idea to help you get what you’re paying for: Work directly with a publisher you trust.