Last month, the Incorporated Society of British Advertising (ISBA) released its Programmatic Supply Chain Transparency report. Responses to the report, which was carried out by PwC, varied, with some industry figures questioning its methodology and others asserting that the report simply emphasised already well-recognised issues with the programmatic infrastructure. From the responses ExchangeWire has gathered from industry figures, however, one key theme emerges: it is up to all factions ad tech to achieve the reform the supply chain desperately needs. Here are some of the responses we’ve received regarding the findings of the ISBA report.
Transparency is urgently needed for an efficient marketplace
The recently released ISBA report highlights that now more than ever, marketers urgently need transparency into their programmatic supply chain costs alongside transparency into the quality of the media delivered. Sometimes identical ad placements have differing costs and sometimes marketers pay more for their lower quality placements. Transparency is king for efficiency-focused marketers and in the current climate all marketers are focused on maximising the impact of every last dollar spent while eliminating wastage.
Tony Marlow, CMO, Integral Ad Science
If nothing else, ISBA’s report will help companies appreciate the supply chain’s complexity
These studies tend to be a bit overblown in both the findings side and the scale of representation the findings have. So, looking at the findings of this specific study, one has to remember that it represents only one market and, more specifically, the approach and buying process of the participating advertisers.
The positive side of these studies is that they show how complex the ecosystem is. Advertisers should understand that setting up a trading operation is much more than getting their own DSP seat. Focus should be on building the tech, data, and media capabilities but more importantly on the processes to go with them that will allow the buying to focus purely on optimising outcomes. This requires expertise and experience.
This is not the first study of its kind nor will it be the last to end up in the same findings. I do not believe that waiting for standards is the answer, at least a quick enough one, but rather increasing knowledge of the ecosystem is. Especially on the buy side. Only this will allow them to navigate the complexity and take full control of their investments.
Christopher Fernandez, managing director, Nordics, Matterkind
Ad funded piracy could explain the ‘unknown delta’
This report calls out a need for standardisation and transparency and we absolutely support that. As an industry, all parties need to step up, clean up and once again lead from the front of being a highly engaging and effective channel for advertisers. We hope that by looking more closely at transparency in general, brands will also think about whether ad funded piracy is appearing in that ‘unknown delta’. Ad funded piracy is due to third party intermediaries in the channel putting ads on popular but unsafe publishers to maximise views, or lack of technology uptake to assess safety of publishers during bidding. In both scenarios more transparency would assist in stopping legitimate ad revenue to pirates. It would be great to see positive actions by brands to clean up their ad supply chains and minimise their complicity in this booming branch of crime; while at the same time improving performance and allowing companies and consumers to benefit properly from digital advertising.
Daliya Wiens, sales director, White Bullet Solutions
Whilst not revelatory, the report could see better cross-industry co-operation
This report, although well produced, does not really tell the industry anything new; more importantly, it lags the market by at least a year. That being said, its conclusion that advertisers should be demand more disclosure around ad serving, fraud and viewability from their agencies is positive for all sides. The report could also trigger advertisers to build more direct relationships with ad tech and publishers, which will only be of further benefit.
We believe that agencies will have a significant role to play as the industry moves forward, and we look forward to future findings off the back of this ISBA report.
Stephen Mitchell, founder, Courageous Consulting SL
Transparency concerns predate ISBA’s report, but can no longer be ignored
My initial and biggest question is no different from most people in the industry: what is this 15% unknown delta, and where does the money go? Financial markets are highly regulated, and, despite its complexity, transparency is the norm. This issue was known before, but having a big auditing company looking into it seems to create more ripples.
Within digital advertising, we’ve seen a multiplication of industry bodies giving guidance on best practices, but, so far, it hasn’t seemed to translate into a more transparent ecosystem. Light needs to be shed on who benefits from this. The time it took to collate data and aggregate it goes to show how hard this task is.
Guillaume Perie, head of programmatic, Thomson Reuters
Whilst perhaps not conclusive, ISBA’s report has opened a Pandora’s Box
For years, the programmatic debate has focussed on how much of a marketer’s budget actually reaches a publisher. So has the ISBA/PwC told report us anything that we did not already suspect? The answer is a resounding no, but it has solidified the conversation and opened a Pandora’s Box on programmatic supply chain transparency, bringing it to the forefront of the wider industry.
The basic theory of programmatic is a simple one, but over the years we have created unnecessary complexities, which make it harder for stakeholders to fully understand every step taken to place an ad on a publisher’s site. These complexities paved the way for bad actors to enter the process relatively unnoticed, and the report confirmed that an average of 15% of investment cannot be attributed and is lost in the process: the ‘Unknown Delta’. This is unacceptable.
Is the report conclusive, given only 31 million (12%) of the 267 million impressions observed were able to be matched due to inconsistencies with contacts, permissions, data and tech? Possibly not, but it will drive a long overdue and urgent review for standardisation of contracts and technology. This in turn will facilitate greater data sharing in the quest to drive the transparency we seek, and the need for the industry to collaborate and dig deeper to understand what actually lies in the Unknown Delta.
Lisa Menaldo, co-founder, The Advisory Collective
Efficiency and transparency should be the industry’s top priorities
Black hole more likely points to unnecessary complexity than to foul play
Whilst I commend ISBA and PwC for the report, I feel too many have jumped on the missing 15% as evidence of foul play.
The main conclusion I would draw from it is how unnecessarily complex the situation is given that a leading auditor struggled to follow the money. Wherever you have unnecessary complexity, you have the opportunity for bad actors to thrive, something we saw in the 2008 financial crash.
It must also be remembered that this is how publishers have chosen to sell their media and it is they who choose their supply side partners. I would recommend large publishers actively declare how their advertisers should best buy their media, through which platforms, and at what prices. A push towards more private market place deals would also clear the water. Large advertisers and publishers have the luxury of being able to transact in which ever way they choose; by working together, they can get the best outcome for both parties.
Robert Webster, founder, Canton Marketing Solutions
Whilst illuminating, ISBA’s report only scratches the surface
Whilst very welcomed, the themes raised by this report sadly come as no surprise. The programmatic landscape is incredibly complex and I am sure that many advertisers understand the benefits that programmatic can bring. What is clear is that we need to mature as an industry and be more proactive in accurately quantifying and addressing the ‘unknown delta’.
Going through the report there are several areas that I believe warrant further investigation. For instance, what was the split of PMP/ OMP buying? SSPs/exchanges have a different take rate with publishers when buying through OMP/ PMP. With regards to auction dynamics, some exchanges and publishers are still trading off 2nd price auction and exchanges deploy various “cost savings mechanisms” as part of bidshading process. To add, some DSPs charge for bidshading and have different tech fee charges structure. Understanding these complexities would help to understand the nuances raised in the report.
Overall, I believe the report is already provoking the right type of conversations. Greater discussion of what ‘transparency’ means and its end goal should be encouraged across all supply chain participants. At the end of the day, asking the right questions, picking the right partners and having the right type of skilled people (planners and buyers) on board is essential for programmatic strategy to succeed!
Anna Lavrova, associate director, commercial technology, Dentsu Aegis Network
Scapegoating intermediaries will fail to solve the true issue of transparency
The study confirms what has long been known in the industry; there is way too much complexity. The blame does not sit on any one pair of shoulders – advertising is an art form, and programmatic advertising retains elements of that art within the science. By measuring and attempting to deliver on pure mathematics, you miss the point. If it was all about matching numbers, we’d all be in finance. The art and creativity is what drew us all in and is why advertisers seek out specialists in our industry.
Discrepancies are expected when dealing with so much data at scale. With each added step in the process, much can be lost along the way. A lot of attention is paid to optimising the supply path, but we need to be equally mindful of the demand path. Reducing the gap between advertiser and publisher is difficult when there are so many intermediaries applying their expertise. However, to say the process is broken and that 50% of ad spend is wasted as it does not reach the publisher, is very misleading. The many intermediaries in the middle provide a service; the issue is really around transparency of their contribution and value.
Problems with measurement and attribution are rife across the industry, and definitely play their part. However I believe any advertiser would be far happier with their ad spend and campaign performance if they were to receive transparent reports stating what has been spent, with whom, and for what service.
Adrian Williams, start-up consultant
Now is the time for marketers to assess the value of their partners
It was interesting, but not surprising, to read the ‘grey’ results of the PwC/ISBA report. As someone who has been working on the supply side, firstly as a digital publisher and then in the ad tech space, there have always been nuances in reporting/data sets. My personal view has always been that the further you are from the money, the less control you have as to where it is spent.
Ultimately, the control sits with the marketers – it is their money, after all. The ‘lost’ 15% that is raised in the report could come from any part of the supply chain, but I would look closer towards the buy side rather than the sell side.
The programmatic supply chain is there to provide market efficiencies – if anyone in the ecosystem is concerned about these, simply look at your vendors and ask yourself “what ROI do we receive from them?”
Bill Swanson, former VP, EMEA, Telaria
Buyers should be feeling the pressure to account for programmatic spend
A thorough look into the state of the programmatic supply chain has been a long time coming. Whilst it’s important to acknowledge that we are still a long way away from achieving the levels of transparency we have long waited for, the real focus should be on what we do with these findings.
From the client-side, we must now think about how we can help marketing teams acquire the skills sets that are, at present, so crucially missing. Marketers are under a lot of pressure to prove the value of their ad spend, and we have a part to play in alleviating that pressure. Personally, I think that revising the contracts with media agencies in light of ISBA’s report would be a positive first step towards achieving this.
Whilst questions about the independence of the report are understandable, they are ultimately unimportant: millions of advertising spend is currently disappearing into a black hole, and this is not something we should be distracted from. We can improve as an industry, and this report is a step in the right direction.
Anoo Memhi, digital marketing lead, EMEA, Quest Nutrition
The findings may not be enough to draw industry-wide conclusions – but they are a start
The ISBA/PwC report has rightly re-focussed advertisers’ attention on the inherent complexity of the programmatic supply chain, the cost to advertisers before media reaches publishers, and the worrying proportion (15%) of spend that is “unattributable”.
Of the four sets of recommendations outlined in the report, those set out for the industry to better understand the “unknown delta” of unattributable ad spend would make a good start. Without instruments like standardised T&Cs for data access and sharing, or a standard definition and expectation of ‘transparency’ in the programmatic supply chain, drawing industry-wide conclusions from reports like this are difficult.
For us, that means continuing to work closely with industry partners like ISBA to help educate advertisers on the common watch-outs in the programmatic supply-chain, such as non-disclosed agency fees. For our clients, that means using technology to optimise campaigns towards better value impressions which predominantly means shorter supply chains, and a larger proportion of their advertising spend going to “working media”.
Louis Connor, business development director, Infectious Media
Marketers hold the leverage to demand action, transparency, and accountability
The ISBA report is a bucket of cold water, and the Environment Agency just classified it a toxic spill.
After fifteen years of programmatic, the disconnected technologies and misalignment in the supply chain still allow intermediaries to obfuscate information, charge too much or commit fraud against the world’s top marketers. As a snapshot of the programmatic world, this report highlights an on-going set of issues that must be addressed.
Programmatic as a type of media is dying, but programmatic as a way of thinking of integrated media buying using automation and data is thriving. Given marketer ad spend is the lifeblood of the ecosystem, marketers hold the leverage to demand action, transparency and accountability. Marketers must invest to understand and control the technologies and data flows, and to drive priorities that automate the flow of financial, contractual, delivery and 3rd party measurement data across open and closed media sellers. This goes beyond ‘in-housing.’
The mission of the industry should be to reduce non-working media costs to <10% within five years. This mission benefits the most important constituents – the marketers and media sellers. Beyond the technical of contractual, delivery and user level data flows, the incentives and different potential conflicts of interests across all participants must also be addressed head on. This will be challenging as incentives are not aligned and conflicts of interest abound.
If we don’t address fundamental trust, safety and certainty issues, advertising investments will continue to be diverted to other more predictable and safe channels.
Ramsey McGrory, CRO, Mediaocean
ISBA’s findings explain why publishers are increasingly turning to first-party data
The ISBA report is very welcome and long overdue. For publishers, the results are no surprise as they see very little of the advertising spend coming down the track – and for many publishers, 51% average would be a good day.
Publishers have long been seeking to diversify revenue streams because of the downward pressure brought about by programmatic and Google and Facebook siphoning off spend. This report proves that news organisations moving to collect first-party data through their own registration processes have been instinctively correct, and the New York Times’s building of its own ad tech is a clear response to the conditions described in the report.
The advertising ecosystem – especially since the advent of programmatic – has become increasingly crowded and opaque, and advertisers should also be deeply alarmed by the fact that 15% of spend is “missing” or unaccounted for. This “unknown delta” does not strike confidence in the value chain, and needs to be addressed urgently.
From the WAN-IFRA perspective, two of the ISBA’s recommendations have a high strategic value: one is that standardisation is urgently required across a range of contractual and technology areas, to facilitate data-sharing and drive transparency; and the second is that industry collaboration is now required to further investigate the unknown delta.
Lisa MacLeod, media consultant and VP, World Association of News Publishers (WAN-IFRA)