Second programmatic supply chain study reveals ‘big step forward’ in transparency

The follow-up study comes over two years after ISBA and PwC’s ground-breaking investigation into the programmatic supply chain, which found 15% of advertiser spend was being lost.

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Transparency in the programmatic supply chain has taken a “big step forward” in the two years and a half years since ISBA and PwC revealed the extent of opacity in the market, but there’s still “a way to go” before advertisers can feel entirely confident, a follow up study reveals.

As of 2020, almost 90% of digital display ads were traded programmatically. That same year landmark research from ISBA, in association with the Association of Online Publishers (AOP) and carried out by PwC, revealed that at the premium end of the market only half of advertiser spend made it to publishers and 15% of spend could not be attributed.

The findings sparked considerable concern among marketers, with some threatening to cut back on buying programmatic display ads until the supply chain became more accountable.

The ‘unknown delta’ of unattributable spend has now fallen to 3%, the latest investigation reveals. Carried out over nine months last year, the study also shows the proportion of advertiser spend to reach publishers has increased to 65%.

“Last time was very much a bad news story. This is different,” PwC’s media and entertainment leader, Sam Tomlinson, tells Marketing Week.  “It’s a really big step forward, but there’s still a way to go.”

Of the 1.3 billion impressions analysed, the number which could be successfully matched from buy side to the sell side nearly doubled to 61 million, with an increase in match rate from 12% to 58%. Both the increase in match rate and the reduction of the unknown delta is a result of greater standardisation in data quality,  Tomlinson explains.

It is in everybody’s interest that the whole industry and all the stakeholders keep working and pushing the industry forward.

Clare O’Brien, ISBA

As such, unlike in 2020, there is “good reason” to believe the unmatched impressions in this study would exhibit similar results to the matched ones.

Eleven advertisers took part in the follow up study, including PepsiCo, Diageo, Sky, Tesco and Vodafone. Like in 2020, it focused on premium advertisers, agencies, tech vendors and publishers, and doesn’t cover the long-tail of the broader programmatic ecosystem.

The study also dug into private marketplaces (PMPs), in which a publisher only makes its inventory available for select advertisers to bid on. PMPs outperformed the rest of the premium programmatic market, with a match rate of 70%, an unknown delta below 1%, and publisher revenue at above 70%.

“If I was an advertiser, I would be spending through well-curated, fully auditable PMPs with premium publishers,” Tomlinson says. “If we were to go into the longtail… I suspect you’d find a mess.”

However, of the 1.3 billion impressions analysed only around 10% went into the 10 premium publishers the study worked with, with 90% going elsewhere.

“There’s quite a lot of spend and websites in there that look pretty longtail to us. So I think there’s still some thinking to be done by advertisers and agencies on where they want their ads to appear,” he adds.

Next steps

The follow up study was conducted in part to test the Programmatic Financial Audit Toolkit, launched in February last year by the Cross-industry Programmatic Taskforce to work alongside existing contracts in response to the findings of the first study. The taskforce comprises ISBA, the AOP, the IAB and the IPA, with input from PwC.

The toolkit aims to help advertisers, publishers and auditors gather standardised data from demand- and supply-side platforms so they can track their spend across the supply chain.

“Every indication we have is that genuinely there have been operational improvements in the premium end of programmatic,” Tomlinson says.

“The task force and the first study was a prompt for that. The taskforce toolkit has then enabled us to access that better quality data and the lower match rate is what comes out. And as a result more money getting through to publishers.”Marketing trade bodies reveal strategy to achieve programmatic transparency

However, the work is by no means done, he adds. The total time it took to execute the study dropped from 18 months to nine months, indicating improvements in data access. However, the time is still short of the five months PwC believes should be achievable for routine audits.

Moving forward, the study recommends advertisers and publishers consider regular supply chain audits to ensure they know where money is being spent. Work also remains to improve data access, retention and transfer to allow these audits to take place.

For ISBA’s head of media effectiveness and performance, Clare O’Brien, the message for advertisers is that by being collaborative in tackling programmatic transparency, “predictability becomes more of a reality and that is a win for everyone”.

She adds: “There is a momentum, and the premium tech vendors themselves are very encouraged with the results and don’t want to slip backwards.

“It is in everybody’s interest that the whole industry and all the stakeholders keep working and pushing the industry forward, so that this is a much more solid, predictable industry with boundaries like other supply chains… And if that doesn’t happen, then you’re talking about an industry that isn’t going to be able to take advantage of its opportunities.”