Only one third of every ad dollar spent reaches an end user

The US advertisers’ industry body has exposed the $88 billion programmatic market’s damning lack of transparency in a recent report – here’s where your programmatic ad dollars may really be going.

Investment in inefficient programmatic advertising across the open web has caused marketers to leave $22bn in potential ad revenue on the table, according to the Association of National Advertisers (ANA) Programmatic Media Supply Chain Transparency study.

The study identified that through a combination of transaction costs and poor metrics, only 36 cents of every dollar that enters a demand-side platform (DSP) effectively reaches consumers.
More than a third (35%) of each ad dollar spent is currently wasted on non-viewable and invalid traffic impressions, as well as non-measurable for viewability and Made for Advertising websites. A further 29% of each ad dollar goes towards transaction costs, primarily being DSP and SSP (supply side platform) costs.

This indicates a troublesome amount of wasted expenditure and with the report identifying little correlation between price and ad quality, investment in programmatic media doesn’t provide advertisers with the reach and viewability they’re paying for.

Programmatic Advertising

In fact, 86% of all ad impressions come from just 3,000 websites – a fraction of what’s available across the open web. To begin rectifying some of these inefficiencies, the ANA has recommended that advertisers reduce the number of SSPs being used to a maximum of seven. The current average number of SSPs used by advertisers is 19. Advertisers are also encouraged to only invest in SSPs that provide log-level legal transparency.

Over the coming days, Performance Marketing World will provide an in-depth analysis of what this report means for the world of programmatic advertising.


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