Days after an Adalytics report shocked the advertising world with its findings that YouTube’s video ad system is riddled with invalid traffic, another report claims that advertisers are losing close to 23 percent of their open web programmatic ad spend every year on ad-waste.
Out of the $88 billion open web programmatic media ecosystem, over $20 billion goes to ad-waste, claims the latest report of Association of National Advertisers (ANA) released early this month. The ANA is the US advertising industry's largest trade association whose members include Disney, General Electric, Nestle, McDonald, Lego, Pepsico, Coca Cola and Loreal etc.
The ANA study blames data gaps, opaqueness of supply chains, lack of ad viewability, huge number of publishers (44,000 websites, mostly created for ads) and “information imbalance” that favours ad sellers as major pain points.
The report has come at a time when marketers are increasingly facing pressure to justify their ad spending, reduce wastage and deliver ROI.
Ironically, programmatic advertising is supposed to help advertisers measure the effectiveness of their digital campaigns at scale to avoid ad spend wastage. It gained prominence globally over the last few years.
What is Open Web programmatic?
Open web programmatic is digital inventory that is bought programmatically but runs on websites/apps that are not owned by the programmatic platform.
“When one buys programmatic inventory on Google DV360 (Google’s DSP), the ad can run on YouTube, Google News and other properties owned by Google, the ads can also run on Google partner websites/apps. The properties which are not owned by Google are considered as Open Web,” explains Sajal Gupta, CEO of Kiaos Marketing.
According to a densu report, programmatic contributes 42% of the digital ad spends of the country that corresponds to Rs 12,000 Cr.
While Google commands a significant portion of programmatic advertising, marketers are increasingly allocating more budgets for Open Web programmatic advertising to reduce their dependence on Google. Bifurcation of the two are not reported.
Cause of concern for India as well: Experts
The ANA study focused on the open web programmatic market was based on log-level data about impressions obtained from the tech vendor. It covered $123 million of ad spend resulting in 35.5 billion impressions.
While the report has come from the US, Indian advertising experts and media buyers said that it was a cause of concern for them as well. “We are reviewing the report as of now. It will be discussed at appropriate forums soon,” India head of an international agency told e4m.
“Any digital traffic that is not brand safe is of concern to any advertisers, Indian or global,” says Gupta, adding, “The probability of unsafe traffic is higher on the open web than on the platform owned properties given the ad placements, hence it becomes important to take steps to measure and control this.”
Kartik Mehta, Chief Revenue & Operating officer of Silverpush, echoes the sentiments, “Any violation of ad inventory standards or incidents that compromise brand safety on these platforms can have significant repercussions for advertisers. It can result in wasted ad spend, negative brand associations, and potential damage to the overall effectiveness of their advertising efforts.”
Programmatic media procurement requires complex networks of middlemen, including demand-side platforms (DSPs), ad exchanges, and data providers. “It is often difficult for marketers to determine how their budgets are being distributed and whether they are getting value for their money in these chains due to a lack of transparency,” a marketer explained.
There is an immediate need to implement brand safety tools to measure brand safety, viewability and frauds, Gupta and Mehta emphasized.
“Don't trust your agency blindly”
Rajiv Dhingra, Founder & CEO of ReBid, says, “If clients in today’s digital age still get excel reports or reports via agency ad accounts without having direct access to the source of ads then clearly they are playing blind. I’m not saying don’t trust your agency. You must trust them but not blindly.” Dhingra adds clients are often unaware about the fact that agencies are running ads on cheaper target audiences to drive clicks and vanity metrics.
Balancing the monetary angle of programmatic media buying is a walk on thin ice with misalignments possible across multiple levels, says Mitesh Kothari, Co-founder and Chief Creative Officer, White Rivers Media. He says parity between intent and goal should be clear before delving into any project for all parties involved.
Upendran Nandakumar, Founder & CEO of Ayatiworks calls for improved data sharing procedures and industry collaboration to make Programmatic media buying more efficient.
(With inputs from Nilanjana Basu)
