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ANA Programmatic Report – Did we really learn anything new?

December 14, 20233 min read

Very little has changed and the potential could still be huge for advertisers.

Over the last ten years the marketing community, while embracing the effectiveness of programmatic communications, has become accustomed to aspects of the process that effectively added margins for agencies and vendors at a far greater level than historic precedents.

Through a mixture of added ‘Technical/Targeting charges’ and platform add-ons the total investment has become inefficient, or in the parlance of our time, Working Dollars are diluted. 

Several studies have now been produced by organisations such as WFA, ISBA and the ANA. The ANA has concluded that the proportion of total investment eventually landing as Working Dollars lay at 36% or less. This means an average of 65% sacrificed for the Technical facilities; the platform management as well as agency commissions/fees.

Staying with that ball-park figure of 65% margin cost, how does the latest “ANA Programmatic Media Supply Chain Transparency Study (December 2023) expand our knowledge?

Broadly speaking the report confirms that very little has changed, and it certainly doesn’t contain any ‘gotcha’ moments. This latest ANA report does however offer greater analytical detail and takes the time to explain exactly how and where the margins are created and accounted for. 

For example the latest estimate on efficiency that states just 36 cents reaches the audience in terms of purchased impressions is now provided and accompanied with more detail breakdown into:

Transaction costs (primarily DSP and SSP fees, but excluding agency and DMP fees), which account for 29% of the ad dollar.

Loss of media productivity costs (non-viewable and IVT impressions as well as non-measurable for viewability and Made for Advertising ad spend), which account for 35% of the ad dollar.

As the report moves through the analysis it becomes clear that this approach provides greater detail beyond the scope of the earlier ISBA and WFA reports. 

However the overall conclusion for advertisers must be to take the ANA’s advice, as stated: “For all marketers, this (Report) presents a perfect opportunity to do a media management self-assessment”

The report has twelve sections.

  1. The Average Campaign Ran on 44,000 Websites

  2. Made for Advertising Websites

  3. Focus on Inclusion Lists, Not Exclusion Lists

  4. Direct Supply Chain Contracts

  5. SSP Optimisation

  6. Information Asymmetry

  7. Advertisers Prioritise Cost Over Value

  8. Optimising OMP and PMP

  9. Price, Ad Quality, and Value

  10. Data Access and Log-Level Data

  11. Measurability, Viewability, and Invalid Traffic

  12. Sustainability 

Each of the sections provides a “Recommended Playbook” for marketers. These are recommended action steps to help optimise investment in programmatic media leading to a greater percentage of every ad dollar reaching the consumer. 

Ultimately, our opinion is that the report doesn’t quite hit the mark, despite the wealth of data analysed and the good intentions. Our team’s individual client reports from 5 years ago came to the same conclusions about percentages of programmatic advertising dollars reaching the publishers. Additionally the methodology used is limited, agency fees are not included in the transaction costs, the results are extrapolated from just a few vendors and there is no mention of white-label mark-ups for the clients of the DSPs, the agencies.

Fuel Media and Marketing came to the following conclusion about the ISBA/PwC report three years ago. It still seems pertinent.

“Fundamentally agencies don’t care if it’s opaque and complex, if it’s efficient they’ll use it and let the rest be the publishers concern (if the supply chain happens to rebate the agency then obviously the agency might prefer to use those individuals over others). As far as complexities go, either the buyer or publisher has consciously made the decision to use that supplier, theoretically to the benefit of the client depending on their targeting 3rd party data needs.

The costs won’t necessarily lower if it becomes transparent, the client will just know what they’re paying.”

For an in depth analysis of your programmatic value chain please get in touch to see what our tools can do and where the opportunities for your brand lie.

Fuel Media and Marketing is a leading specialist communications consulting company. Our teams advise clients in the field of media communications. To find out more on how Fuel can help, contact Oli on +44(0) 7534 129 097 or email [email protected] 

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