Effective Programmatic Ad Buys Remain Elusive Due to Transparency and Complexity Concerns [REPORT]

Achieving transparency in the programmatic media buying ecosystem remains a persistent challenge for marketers, but there are steps companies can take to ensure that their agencies and media partners are held accountable for digital ad expenditures, according to a new study.

The study, “Programmatic: Seeing Through the Financial Fog” was conducted jointly by the ANA (Association of National Advertisers), the ACA (Association of Canadian Advertisers), Ebiquity, and AD/FIN.

The study took a data-centric approach, processing over 16 billion in-market programmatic transactions across participating advertisers. The resulting analysis provides a first ever inspection into how advertiser budgets were actually spent along the digital supply chain with insights around costs and fees incurred for media, technology, service and data. “Programmatic is becoming the most dominant approach to buying digital media because it offers targeting precision, scalability, cost efficiency, real time optimization and unprecedented leverage of big data for advertisers,” said ANA CEO Bob Liodice. “However, programmatic remains complex and often non-transparent. Our study revealed that this lack of transparency makes it difficult for advertisers to manage, measure and audit programmatic media investments with the same rigor as traditional media investments.”

Liodice said the study was designed to provide practical solutions to help advertisers take greater control of their programmatic investments and to investigate the costs and economics of the programmatic ecosystem.

Among the findings, the study showed widespread use of non-disclosed programmatic buying arrangements between marketers and their agencies as well as substantial knowledge gaps about how the programmatic ecosystem works. It also indicated a lack of industry standards and protocols that would help advertisers analyze the costs and effectiveness of their programmatic investments against market norms and benchmarks.

The report concluded that advertisers may have difficulty managing their programmatic investments with the same rigor as traditional media investments, and specifically that many advertisers engaged in programmatic media buying:

  •     Do not have adequate transparency around their programmatic media investments to make the most informed business decisions to build business performance and brands.
  •     Do not properly understand the economics of programmatic media to manage the complex supply chain that underlies each transaction.
  •     Lack the necessary knowledge of programmatic media costs, agency/trading desk fees and performance details to meet internal measurement and management requirements.
  •     Need tools and guidance to manage and optimize their programmatic supply chain.
  •     Should upgrade their media agency contracts to manage and optimize their programmatic supply chain.
  •     Are more successful with clear programmatic KPIs, aligned incentives and clear roles and responsibilities across all parties are in better control over their media investments.

“We learned a lot in this study, not just from the billions of impressions analyzed, but from the roadblocks and challenges thrown in our way,” said Andrew Altersohn, CEO of AD/FIN. “We’re excited to pass along what we learned, to share what the data told us, and most importantly, provide practical recommendations for advertisers to obtain greater accountability and insight into their programmatic dollars.

SOLUTIONS AND RECOMMENDATIONS

The study provides an “Advertiser Playbook” with an eleven-step plan to enhanced programmatic accountability. Key steps marketers should take include the following:

  •     Clarify the advertiser-agency-third party relationships and ensure disclosures of all conflicts of interest. Given the level of debate in the marketplace around the fiduciary responsibilities of agency and buying partners, we recommend complete clarity on this topic with respect to programmatic media.
  •     Make an informed programmatic disclosure and accountability decision. Whether to engage and purchase programmatic media on a disclosed or non-disclosed basis is a critical decision for every advertiser.
  •     Implement the “transparent” programmatic planning and buying model that’s right for your organization. Advertisers do have choices on how to engage in programmatic media buying to get the level of accountability and transparency they need. These choices include (a) in-house programmatic buying, (b) disclosed agreement with agency with advertiser control of the tech stack, (c) disclosed agreement with agency with agency control of the tech stack, (d) and non-disclosed.
  •     Enhance MSA/media buying agreement(s) to meet accountability needs and expectations. These include disclosure of data ownership and control, audit rights, data security requirements and disclosure of third party fees.
  •     Put disclosure to work and instill verification, financial reporting and audit protocols by taking control of programmatic transaction data at the core of every impression purchased on the advertiser’s behalf.
  •     Stay vigilant — “trust but verify.” Given the changing landscape of digital media and the potential for new service providers, DSPs, tech providers, and data providers to be added (or dropped) from your media stack, marketers should conduct a data and disclosure review on a recurring basis.


To download report CLICK HERE

 

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