Report: Brands Lose 50pct of Funds Invested in Programmatic Advertising

[engine]

According to a new study, 50% of the money invested does not reach the online publishers, with as much as 15% unattributable to anybody in the supply chain.

The advertiser-funded research from ISBA, in association with the Association of Online Publishers (AOP) and carried out by PwC, marks the first time that programmatic advertising supply chains have been mapped from end-to-end, anywhere in the world.

The study highlights the need for urgent standardisation across a range of contractual and technology areas to facilitate data-sharing and drive transparency, as well as industry collaboration to further investigate the unknown delta.

[marketingweek.com...]

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[heisje]

Still Wild West in 2020. Because the Tech Robber Barons are still treated as Holy Cows by big business and politics. I'm not sure the complaining suckers deserve any better. After all, it's their own creation. Like with snake oil, it takes two to tango. Serves them right, I feel, as they have squandered their enormous economic & political power to demand accountability from early on.

They have bread Monsters in Advertising as well as Retail in their greedy quest of crashing their competitors. Will be interesting & entertaining to watch how this plays out in the coming years.
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[iamlost]

This not the first such study. Previous ones have found results as low as 9% to 11%. Much depends on the participants at each ‘level’ of the programmatic ad process; truly a multi-man-in-the-middle cash grab revenue siphon. Not all ad exchanges, including ‘name’ ones, are, ummm...

All on top of the multitude of ye olde fraud scams that continue to adapt and proliferate.

Over the past three or four years a growing number of large advertisers have been cutting back the percentage of programmatic ad spend to single digits while increasingly cutting direct publisher deals. Yet another reason AdSense and similar ad fills value can seem, niche dependent, to be in free fall.

[csdude55]

The article stated that they collected data from 8 agencies, 5 DSPs, 6 SSPs, and 12 publishers. But at what level is Google? And how are the results differentiated between Google and, say, Facebook?

I know from personal experience that FB is extremely "off" with their results, but this article implies that they ALL are dishonest. What I don't know is whether one poorly designed (or flat out dishonest) DSP or SSP is throwing off the numbers for everyone.

[iamlost]

While there certainly is great opportunity for ‘skimming’ or outright fraud in the digital ad model such is only the icing on the great ad ‘gold rush’ cake.
Note: a casino has no need for dishonesty, the odds say so.

The following is a generic model of the process by which an advertisers total spend gets diverted on its way to the publishers displaying an ad.
* advertiser: spends $100 (100%)
* (AoR) agency of record takes $5 (95% remaining)
* trading desk takes $15 (80% remaining)
* (DSP) demand side platform takes $10 (70% remaining)
* data targeting and verification takes 25% (45% remaining)
* ad exchange takes 5% (40% remaining)
* publisher gets $40 (40% of advertiser spend)
HOWEVER:
The above is based on there being no fraud in the system.
Faux REALITY:
There is at least (industry self reporting) 12% fraud so...
* publisher gets $28 (28% of advertiser spend).

Yes, fraud is a major concern and one that gets a great amount of attention, however it is also used as a stalking horse to obfuscate the many grasping hands in the middle between advertiser and publisher.

Note: there are a number of different digital ad delivery methodologies, however the above is fairly representative.

Note: third party networks, i.e. Google, do the equivalent in house, one stop shopping. No need to share the lucrative soft creamy middle.

[waitwhiterabbit]

iamlost..its a more distributed ecosystems .... there are very real operating costs for agencies, dsps, and 3rd party data providers...not saying that there is no money lost from fraud but its just different then walled gardens

[iamlost]

@waitwhiterabbit: yes.
I wasn’t complaining so much as explaining all the MitM aka agents in the programmatic process for those that might not be aware.

I’m also showing by implication the amount of money on the table leverage available for those in a position to sell ad space directly. Less ad cost and greater specificity for advertisers and greater ad revenue per ad unit for publishers.

Regarding fraud think of the continual claw backs (identified fraud) that diminish publisher revenue (from legitimately in good faith displayed ads) and the unidentifiable fraud along the entire process that diverts advertiser spend impairing ROI.