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Nearly a quarter of every dollar spent on programmatic advertising is going toward “suspect inventory,” according to the Association of National Advertisers (ANA) in a new report on (brace yourself) ad-tech supply chain transparency.
The report found that 23% of the $88 billion spent on programmatic advertising is wasted, accounting for about $20 billion in lost ad spend, largely on “made for advertising” websites that typically draw readers in with clickbait.
One weird trick: MFA sites accounted for 21% of the report’s impressions and 15% of ad spend. An average campaign for the study’s participants ran across 44,000 websites. That “long tail” of the internet can leave advertisers susceptible to “fraud, viewability, and brand safety” concerns.
“Chasing cheap CPMs will likely lead to a cascade of downstream ad quality issues that might not be initially detectable,” the report stated. “Common sense should tell buyers that not all ‘cheap’ inventory is ‘quality’ inventory.”
A similar report released last summer found that advertisers spent a tenth of their budget on clickbait.
Methodology: The ANA’s study included an analysis of what’s called log-level data, or granular information from ad-tech firms that can reveal details about programmatic transactions between advertisers and publishers, and the twisted and convoluted pipes created by industry middlemen.
The ANA’s study included data from 21 advertisers across 35.5 billion impressions, totaling $123 million in spend. The trade body said the majority of companies that wanted to participate in the study were unable to do so because of legal obstacle and difficulty getting access to their own log-level data, further muddying the waters.
The study, a two-parter with the second segment set to be released “in the next few months,” according to a press release, is one of many recent attempts to audit the programmatic supply chain. In 2020, a UK advertising trade group commissioned research from PwC, finding that 15% of ad-spend “could not be attributed,” dubbing it the “unknown delta” of programmatic advertising.
Zoom out: The ANA is advising advertisers to “lean in” and take more responsibility in their media buys, “rather than delegating” the responsibility “to their agencies.” They should also ask for direct access to the data that’s used in programmatic advertising transactions.
“Buyers need to ensure that there is a balance between the price they’re paying and the quality of inventory they’re receiving,” the report said.