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ANA Releases Part 2 of Comprehensive Programmatic Media Buying Study

Report Includes Wide Range of Recommendations To Help
Media Buyers Optimize Programmatic Investments

NEW YORK (December 5, 2023) — Media buyers currently using an overabundance of  websites (40,000-plus) should select 75-100 trusted programmatic media sellers that will provide access to thousands of high-quality websites to optimize their investment, according to a new ANA report.

The report, ANA Programmatic Media Supply Chain Transparency Study: Complete Report, also said buyers should consider having direct contracts with all primary supply chain partners—DSPs, SSPs, and ad verification vendors, and that advertisers should appoint a chief media officer to take responsibility for the internal media management and governance processes.

The report is a follow-up to an ANA “First Look” study published in June 2023.  The new, enhanced study delves deeper into the dynamic world of open web programmatic advertising, with a focus on a pivotal issue: transparency.

The Complete Report states that there is the opportunity for $22 billion in efficiency gains – amounting to one in four dollars spent in the $88 billion open web programmatic marketplace.  The study provides a range of recommendations that could save marketers billions of dollars.

“Over the past decade, open web programmatic advertising has become an indispensable investment opportunity for most marketers,” the report stated.  “It offers a plethora of potential advantages, including the precision to target the right audience and substantial cost efficiencies through automation. Nonetheless, programmatic media is complex and can be non-transparent and therefore it is essential for marketers to maintain vigilance. Taking your eye off the ball can lead to questionable inventory practices, thereby diluting the potential of programmatic advertising as a potent tool for driving results.”

In a foreword to the study, ANA CEO Bob Liodice said a key challenge marketers face in optimizing their programmatic investment is a profound lack of data access, data strategy, and information symmetry.

“Marketers are not fully skilled in optimizing the management of their data,” Liodice said.  “Of critical importance, marketers are even less skilled in securing log-level data — a principal pathway to effective decision-making and driving growth via programmatic activities.”

He added that marketers are unable to fully retrieve their brand performance data because of contractual limitations with their respective partners in the digital media supply chain and are left with sub-optimal information to make the most effective marketing decisions for their brands.

Information asymmetry is an imbalance in the nature and quality of information possessed by different parties in a transaction. Within the programmatic supply chain there are strong characteristics of information asymmetry in cases where sellers typically have more or better information than buyers about the quality of media inventory being sold in auctions.

The Complete Report issued today reprises key elements of the First Look study but goes deeper on key topics covered in the initial report, such as the number of websites used, Made for Advertising websites (MFAs), data access, sustainability, and others. It also introduces new topics including:

  • Inclusion Lists
  • Having an SSP Optimization Strategy
  • Optimizing the Mix of Open Marketplace (OMP) and Private Marketplace (PMP) Deals
  • Measurement, Viewability, and IVT (Invalid Traffic).

The report detailed the programmatic cost waterfall and revealed that only 36 percent of every dollar invested by an advertiser that enters a DSP effectively reaches the consumer. Between the advertiser and the consumer, there are intermediaries claiming their share of the ad dollar. The report buckets them in two ways:

  1. Transaction Costs: 29 percent of every dollar goes towards DSP and SSP fees, etc.
  2. Loss of Media Productivity Costs: 35 percent of every dollar is spent  on non-viewable, IVT, non-measurable, and MFA traffic.

KEY RECOMMENDATIONS
The report is divided into sections, each offering a “Recommended Playbook” for marketers, which propose measures to help optimize investment in programmatic media. Key steps include:

  • Prioritizing the creation and use of website “inclusion” lists versus focusing on “exclusion” lists. Attempting to exclude individual sites from the vast expanse of millions of sites, with new domains being created every day, is a herculean and futile task.  Buyers should focus on what they want rather than what they attempt to avoid.
  • Buying through direct inventory supply paths.  Each additional move to a new supplier drives up cost as well as the buyer’s carbon footprint. If a marketer starts with a list of 75 to 100 high quality, trusted sellers, they’ll get thousands of high-quality domains.  Trusted sellers, by definition, are partners known for their credibility and reliability in the programmatic ecosystem. Trusted sellers transact with buyers on direct supply paths as opposed to reseller paths that add more markup and generate carbon waste. Ideally, they do not engage in the sale of MFA inventory, as their business thrives on transparency and authenticity.
  • Assess the value of your programmatic advertising.  This requires the accurate measurement of ad quality and price.  Among other steps, marketers need to get access to their  log-level data and then ingest, match, and harmonize it either in-house or via a third-party company. Tapping log-level data from every adtech vendor across an advertiser’s supply chain is paramount. Marketers must match that data to show where value is hiding and where there is no value at all.
  • Have an SSP optimization strategy. Consolidate spending with a short list of preferred partners that are willing to provide financial incentives in exchange for an elevated share of spend. Five to seven SSPs are likely optimal and can provide access to close to 100 percent of the supply.
  • Increase understanding of what types of Private Marketplaces (PMPs) you buy from and consider experimenting with allocating more budget towards Open Marketplaces (OMPs). Some PMP inventory is high quality and may be worth the premium price, but the days of simply assuming all PMP inventory is worth the premium are gone.

METHODOLOGY
The Complete Report was developed by the ANA in collaboration with its core project team: Lemonade Projects, TAG TrustNet, Reed Smith, and Kroll.  Twenty-one marketers participated in the study, along with 12 supply chain companies, including three DSPs, six SSPs, and three ad verification companies.  Participating companies are identified in the report.

The full report can be accessed here.

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ABOUT THE ANA
The ANA’s (Association of National Advertisers) mission is to drive growth for marketing professionals, brands and businesses, the industry, and humanity. The ANA serves the marketing needs of 20,000 brands by leveraging the 12-point ANA Growth Agenda, which has been endorsed by the Global CMO Growth Council. The ANA’s membership consists of U.S. and international companies, including client-side marketers, nonprofits, fundraisers, and marketing solutions providers (data science and technology companies, ad agencies, publishers, media companies, suppliers, and vendors). The ANA creates Marketing Growth Champions by serving, educating, and advocating for more than 50,000 industry members that collectively invest more than $400 billion in marketing and advertising annually.

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ANA
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