Programmatic Advertising: Why transparency remains the biggest challenge

The promise of programmatic advertising, apart from providing fodder for b2b marketing articles, has always been efficiency—automating the buying and selling of ad space through complexified algorithms to deliver the right message to the right audience at the right time. Over the past decade, the rise of AdTech has revolutionized digital marketing, making it faster and more scalable. However, alongside these advancements, a lingering issue remains: transparency.

As programmatic advertising accounts for an increasing share of digital ad spend, both in India and globally, the call for greater transparency has never been louder. Despite technological advances, key challenges around data sharing, hidden fees and accountability remain unresolved. So why is it that in an era of automation and data, the programmatic ecosystem is still marred by opacity?

Significant progress has been made in addressing these concerns, with tools and initiatives that aim to increase transparency. Nikhil Kumar, Chief Growth Officer, mediasmart by Affle, highlights, “Transparency in programmatic advertising has improved significantly over the years due to the evolution of adtech and increased demand from advertisers and regulators for clearer insights into how their ad spend is being used.”

However, while certain areas have improved, persistent gaps continue to challenge advertisers.

The Good!

Advertisers today have better access to detailed reporting on impressions, clicks, and conversions through real-time dashboards, but many remain wary of the complexities and hidden costs of programmatic. Industry-wide initiatives like Ads.txt and App-ads.txt, “spearheaded by the IAB, have helped increase transparency by enabling publishers to declare which companies are authorized to sell their inventory,” says Kumar. These measures reduce risks like domain spoofing and ad fraud, but their success largely depends on their adoption across the industry, which has been uneven.

For advertisers, the focus has shifted towards quality and accountability. Ishank Joshi, MD and CEO of Mobavenue, explains that “more than half of advertisers now prioritize quality inventory and brand safety, driving higher standards across the value chain.” This push for greater control over ad placements is reshaping the landscape, yet advertisers still find it difficult to track exactly how much of their spending reaches intended consumers due to intermediary fees and platform fragmentation.

With over 70% of digital ad spend now transacted programmatically, transparency has become a top concern for advertisers. However, not all programmatic ad spend delivers equal value. Audits reveal inefficiencies and hidden costs, particularly in complex supply chains. This brings into question whether the current levels of transparency are sufficient for a rapidly growing and evolving ecosystem.

One of the most promising developments to tackle these inefficiencies is Supply Path Optimization (SPO). Abhinay Tiwari, Chief Growth Officer at Admattic, states, “SPO has become a key driver in reducing opaqueness in programmatic advertising by streamlining the supply chain and increasing transparency around media spending.”

The Bad?

However, while SPO simplifies the path between advertisers and publishers, it does not eliminate all issues. Intermediaries still play a significant role in the digital advertising supply chain, and their fees can remain hidden without stricter transparency measures.

Kumar explains that “SPO involves cutting out unnecessary intermediaries,” which indeed helps, but it’s important to recognize that not all intermediaries are inefficient or non-transparent. Some serve vital roles in targeting and optimization, meaning that the focus should be on evaluating the value each intermediary provides, rather than simply eliminating them.

Tiwari emphasizes that SPO “ensures accountability at every stage of the buying process,” yet gaps in post-bid transparency, where advertisers often lose sight of ad performance, remain a challenge. The process of reducing hidden fees and optimizing inventory quality is ongoing, and while SPO is a step in the right direction, full transparency is far from realized.

Emerging technologies like blockchain and AI also show promise in addressing some of these challenges, but their impact is still in its early stages. Blockchain, in theory, could create an immutable ledger of transactions, as Kumar mentions, but its implementation on a large scale has been slow and faces barriers around cost and scalability.

Tiwari concurs, saying, “Emerging technologies like blockchain and AI-based attribution further enhance transparency,” but these technologies are not without their limitations, including privacy concerns and the complexity of real-time verification.

Moreover, as Joshi points out, the industry's pivot towards privacy-first advertising is introducing new layers of complexity. The growing reliance on first-party data and stricter data regulations can conflict with transparency efforts, as advertisers now have to balance openness with consumer privacy. This shift, while positive for data protection, complicates efforts to create a fully transparent programmatic ecosystem.

The meh (real deal)…

Vinay Singh, co-founder of Digixpressions, highlights the financial implications of this ongoing push for transparency. “There is a pressing need for advertisers to focus on transparency practices within programmatic advertising. This helps avoid overspending and reduces the risk of fraud,” he observes.

However, balancing cost-effectiveness with full transparency remains a delicate act, especially for smaller advertisers who may lack the resources to fully audit their supply chains.

In conclusion, while significant strides have been made toward creating a more transparent and accountable programmatic ecosystem, critical gaps remain. Kumar’s observation that “a fully transparent ecosystem is still evolving” underscores the complexity of the task.

The integration of emerging technologies, ongoing industry-wide initiatives, and the drive for greater accountability have moved the needle, but there is still work to be done.

For advertisers in India, staying informed about these developments and actively implementing transparency-focused tools like SPO and Ads.txt will be essential in minimizing fraud and ensuring ad spend efficiency. As the landscape continues to evolve, transparency will remain at the forefront of programmatic advertising's future.