The Incorporated Society of British Advertisers (Isba) has released the results of an in-depth probe into the adtech supply chain, finding that publishers receive only 51% of advertiser spend. One-third of supply chain costs were unattributed, which may force transparency from the convoluted process going forward.
The Isba Programmatic Supply Chain Transparency Study, carried out by PwC, attempted to map the programmatic advertising supply chains and learn where the value is being extracted. Data was collected from 15 advertisers, eight agencies, five demand side platforms (DSPs), six supply side platforms (SSPs) and 12 publishers for the study, accounting for approximately £0.1 billion of UK programmatic media spend.
Isba has called for an immediate investigation into the “unknown delta” that is extracting one-third of supply chain spend, a move which will require industry collaboration, and for standardisation across “a range” of contractual and technological areas.
PWC said there was a lack of understanding and consistency among the adtech suppliers, particularly legal data sharing, storage, and uniformity, particularly between SSPs and DSPs.
“These challenges and complexities do not serve the principal interests of advertisers or publishers,” it said.
It comes at a time when publishers need to squeeze more value from the chain with ad revenue diminished as a result of the coronavirus pandemic. The industry is also ramping up awareness of over-zealous brand safety keyword blocking; 'coronavirus' blocks alone, Newsworks estimated, will cost the UK news industry £50m in lost inventory in just three months.
Phil Smith, director general of Isba, said: “It is the first time anywhere in the world that an attempt has been made to map a system which is not capable of being audited. This process has been led by our members, advertisers who proactively sought to understand a problem and find a way forward. The challenge now is for industry to come together, as they will in the new taskforce, to drive industry standards and create transparent supply chains, to allow companies and consumers to benefit properly from online advertising.”
Graeme Adams, head of media at BT Group, took part in the investigation and branded the lost cash “a big hole in the value chain”. While he admitted that “digital display is an effective sales driver for us,” he acknowledged that every penny needs to be accounted for, which requires more openness and transparency. “If not, we will cut back and reshape our trading approaches.”
Jon Mew, chief executive of the IAB, added: “Programmatic advertising is complex, but it is not a dark art and we shouldn’t lose sight of the valuable role it plays in supporting our open, ad-funded web.” Again, he pointed to collaboration to “shine a light” on each stage of the chain.
Nigel Gwilliam, director of media affairs at The IPA, proposed Jicwebs as “the obvious body to facilitate this collaboration”.