ANA Provides “First Look” at In-depth Programmatic Media Transparency Study

Report Reveals Lack of Transparency and Widespread Waste and Includes Recommendations That Should Save Billions

NEW YORK (June 19, 2023) — The current $88 billion open web programmatic media ecosystem is rife with waste, but advertisers could generate as much as $20 billion in efficiency gains by implementing certain steps, according to a new ANA report.

That is one of the key insights contained in the ANA Programmatic Media Supply Chain Transparency Study that provides “first look” findings intended to accelerate  the ongoing industry discussion on transparency and productivity in the programmatic media supply chain. It is the first segment of a two-part report; the follow-up will be released in the next few months and will address additional issues including ad quality, pricing, viewability, measurability, and ad fraud.

The study’s primary conclusion is that the $88 billion open web programmatic media ecosystem is riddled with as much as $20 billion in waste, a figure that represents 23 percent of  the total open web programmatic media investment by marketers. One of the key reasons is that incentives driving advertiser behavior are often misaligned with the goals of their marketing campaigns, the report said.

“Advertisers prioritize cost over value, sometimes to their own detriment,” the report stated.  “They chase cheap CPMs.  The primary incentive driving programmatic media buying behavior is cost—getting the most impressions for every dollar. On its face, this might seem like a sensible incentive. However, in the media world not all inventory and not all impressions are equal. Common sense should tell buyers that not all ‘cheap’ inventory is ‘quality’ inventory.”

ADDITIONAL KEY FINDINGS

• Data Access is Lacking, Resulting in Transparency Issues, Leading to Inefficiencies and Waste.While brands appear to have more access to data today than previously, data gaps and lack of transparency still plague the programmatic space. The most common explanation is simple: if brands don't own their supply contracts attached with specific data rights, then they are blocking themselves from turning data into valuable information to maximize transparency.
• More Waste — The Average Campaign Ran on 44,000 Websites.  The report said it was “deeply concerning” that the average number of websites for survey respondents was 44,000 top-level domains. “Advertisers can reach a high percentage of target audiences using a few hundred websites,” the report said, cautioning that “care must be taken, however, to ensure any reduction does not disadvantage small or minority-owned or minority-targeted service providers.”
• Information Asymmetry Leads to Inefficient and Unproductive Media Investment Decision Making — Resulting in Substantial Waste.  The study defined information asymmetry as “an imbalance in the nature and quality of information possessed by different parties in a transaction.”  There is evidence of information asymmetry in cases where sellers typically have more or better information than buyers, causing buyers to overpay for inventory.  The report called information asymmetry “a roadblock that makes transparency difficult to achieve and, instead, serves to perpetuate a system that is opaque, confusing, and potentially inefficient.”
• Made for Advertising (MFA) Websites Represent 21 percent of Impressions — Indicating Advertisers are Not in Control of Media Placement Decisions.  MFA websites comprised a startling 21 percent of study impressions and 15 percent of ad spend. MFA sites usually feature low-quality content, such as fake news, conspiracy theories, or spammy links, and may use tactics such as pop-up ads, auto-play videos, or intrusive ads to maximize ad revenue for the site owner.

FIVE STEPS TO ACHIEVING EFFICIENCY GAINS

1. Advertisers must become far more responsible and provide more active stewardship of their media investments. Advertisers need to “lean in” and be more active stewards of their media investments rather than delegating that entirely to their agencies.
2. Marketers need direct data access contracts with all primary supply chain partners. Transparency maximization and data access rights go hand-in-hand. Consider having direct contracts with all primary supply chain partners – DSPs, SSPs, and Ad Verification vendors.
3. Construct agency partnerships that provide complete access to data and full transparency of websites purchased on media buys; know the difference between agent and principal. It’s important for advertisers to know when their agency is acting as their agent and when the agency is acting as principal. If an agency is acting as a principal, it does not need to act in the best interests of the marketer, unless contractually required to do so. Nor is it legally obligated to be transparent, unless contractually required to do so.
4. Prioritize quality media buys. Cheap CPM buys can lead to non-viewable/non measurable media purchases. Advertisers need to better balance their pursuit of low-cost inventory in programmatic with ad quality — meaning viewable, fraud free, and brand safe.
5. Demand that “Made for Advertising” websites be excluded from a media buy unless they are specifically wanted or needed. Advertisers should determine if MFA sites fit with their brand suitability standards for content and user experience and clarify their tolerance for the inclusion of MFA inventory in their campaigns.

METHODOLOGY

Twenty-one (21) ANA member companies participated in this project.  The data analyzed in this report is based on log-level data (LLD). LLD is the detailed record of everything about an impression obtained from the tech vendor.  The study was conducted between September 2022 and January 2023, covering $123 million in ad spending resulting in 35.5 billion impressions. The study focused on the open web programmatic market and used log data and combined other data sets to understand ad impression quality making it (or not) to consumers. The lion’s share of impressions from an ad placement perspective were classic banner and video ads served on sites and apps.

The full “First Look” report can be accessed here.

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ABOUT THE ANA

The mission of the ANA (Association of National Advertisers) 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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