The current programmatic media ecosystem is “rife with waste” to the tune of $13 billion and maybe as much $20 billion according to a new study by the Association of National Advertisers.
The organization issued what it called a “first look” today of a more in-depth study that will be issued later this year.
And the report lays much of the blame for inefficiencies in the programmatic arena on the advertisers that utilize it, saying that they too often put cost ahead of value and more generally fail to exercise proper stewardship over investments in the space.
The report cites so-called “made for advertising” websites which it asserts account for 15% of the current $88 billion open programmatic web market, which the study focused on and which accounts for about 17% of the digital ad market. Such websites, per the report usually feature low-quality content including fake news and conspiracy theories. Such sites are also rife with links to spam, pop-up ads and other intrusive formats to maximize revenue.
According to the report, the average campaign runs on 44,000 websites, which by definition is wasteful. “Advertisers can reach 95% of audiences using a few hundred websites.”
Another big problem is a lack of data, often driven by the fact that advertisers often don’t demand specific data rights in their buying contracts. Without better information, advertisers often overpay for inventory.
The methodology for the report illustrates part of the problem. Sixty-seven ANA member companies volunteered to participate in the study but only 21 ultimately were able to do so. The 46 others were blocked by their contracts or other hurdles from getting access to log data from DSPs, SSPs, and ad verification providers. The log-level data, upon which the report is based, includes a detailed record of everything about an impression obtained from the tech vendor involved in a programmatic transaction.