One year ago, the Association of National Advertisers released the first part of its Programmatic Media Supply Chain Transparency Study.
But it really should have been named The Lack of Programmatic Media Supply Chain Transparency Study.
Because that report, and the follow-up study published in December, uncovered an appalling amount of programmatic waste, including $22 billion a year thrown away on an unholy combo platter of made-for-advertising sites, indirect supply paths, invalid traffic and numerous other ad tech shenanigans.
The average programmatic campaign was found to run on a whopping 44,000 websites, and MFA accounted for more than 20% of all programmatic impressions.
In short, a mess.
There has been some improvement, though, according to the ANA and TAG TrustNet – and they say they can prove it.
ANA vs. MFA
On Monday, to coincide with the first day of the Cannes Lions festival, the ANA and TAG TrustNet released the first of what will be quarterly industry benchmarks that aggregate log-level data across multiple marketers.
The purpose of the benchmark is to create a gauge advertisers can use to determine how their programmatic campaigns compare with the broader industry in terms of MFA activity, media quality, CPMs, sustainability and DEI.
“The 2023 study was a wake-up call to the industry to say, ‘You may not know it, but you’re out of control,’” said ANA CEO Bob Liodice. “What this does is provide the guidance that buyers need so they can ask the right questions and do it on an ongoing basis.”
According to this first benchmark, which includes an analysis of log-level data for 11 brands (all ANA members), the amount of media dollars being spent on MFA dropped from 15% to 4%.
The ANA attributes at least some of that decrease to all the attention MFA got in the press after the release of its programmatic transparency reports last year.
And because many advertisers have taken pains to reduce the number of duplicative SSPs and exchange partners they work with, the average programmatic campaign now runs on around 23,000 websites, down from 44,000.
“These reports have really raised awareness across our broader client base to make transparency a priority,” said George Manas, CEO of Omnicom-owned media agency network OMD. “The time is now to continue pushing it forward in a more formal and industrialized way,” especially as video becomes more programmatic and there’s room for the same old challenges to resurface.”
(CTV wasn’t included in the ANA’s programmatic transparency studies but is being included as part of the new benchmarking project.)
No rest for the weary
But despite quantifiable headway, there’s still work to be done.
For one, reports produced by others paint a less rosy picture of the industry’s progress. According to research released by DoubleVerify just last week, it saw MFA impressions actually increase 19% YOY in 2023.
And although 23,000 websites is an improvement, it’s still a heck of a lot of sites in a world where The Trade Desk is out there talking up the “premium internet.” (TTD recently published a list of what it considers to be the top 100 publishers, and also claims that 50% of the ad revenue on its platform comes from just 500 publishers.)
That 23,000 number is just the average, though, said Tim Brown, CEO of Fiducia, TAG TrustNet’s technology partner. Looking at the range tells a more nuanced story, he said.
Across the 400,000 domains Fiducia analyzed, there was a cohort of advertisers that only served impressions on 3,000 sites, and another that only ran campaigns on 500 sites. In other words, there’s a spectrum of buying behavior, with some advertisers doing a pretty good job, and others that continue to prioritize reach over quality.
“It’s hard to believe anyone can get much reach from the very, very long tail,” Brown said, “but that is one of the things I kept hearing from advertisers, that they needed so many sites for reach. But, and I’ve said this before: Cheap can be expensive.”
Put another way, if your KPI is the size of your audience, but reach isn’t driving measurable outcomes, then that’s not a very good KPI.
After the pandemic, Manas said, many marketers “skewed way more transactional” in their media tactics and started chasing short-term proxies, like click-through rate and video views instead of longer-horizon KPIs, such as brand consideration, affinity and lifetime value.
“But as marketers come out of that mode,” he said, “they’re reevaluating their KPIs to find a better balance between short-term and long-term objectives.”
Reality check
Which is why the ANA advocates what it calls “TrueKPIs,” as in metrics that mean something, as opposed to vanity metrics that aren’t correlated with performance.
The TrueKPI framework, which the ANA released in December, helps marketers evaluate impressions based on their true value rather than on price.
For example, say an advertiser pays a $5 CPM for 10 million impressions, so $50,000 in total ad spend. Cool. But if that advertiser were to analyze those impressions based on quality, it might turn out that 7 million of them were valuable and the rest weren’t. That would mean 3 million impressions were effectively wasted at a $5 CPM, or $15,000 down the drain.
The true CPM in this case would actually be $7.14. Not as cheap as you thought.
Of course, it’s an advertiser’s prerogative to spend their ad dollars however they want to. The point is to be able to spend with their eyes open.
“This system is helping us find out that information asymmetry can be punctured through greater knowledge of the quality that you get for the price paid,” Liodice said. “That’s where we need to continue increasing our level of sophistication.”
