Interviews, insight & analysis on digital media & marketing

Adnuntius: A new model for programmatic advertising

By Stian Remaad, CEO and Co-founder at Adnuntius

There are a lot of benefits to programmatic advertising. There’s scalability for one. For publishers, it means you can put your spoon into the bowl and scoop up revenue. For buyers, you can log into a DSP and suddenly gain access to thousands of publishers around the world. The problem is that those benefits come at an even greater cost.

Last year, ISBA and PwC released a report looking at transparency within the programmatic supply chain. The report found that, on average, publishers only receive 51% of advertiser spend, while as much as 15% of spend could not be attributed to any stakeholders. The remainder of advertiser spend went toward agency fees (7%), DSP fees (8%), demand-side technology fees (10%), SSP fees (8%), and supply-side technology fees (1%).

For obvious reasons, the 15% ‘unknown delta’ is what has been getting the most attention since the report findings were unveiled, because that’s around $22.5 billion of a $150 billion industry which is unaccounted for – that’s a lot of money seemingly disappearing into thin air. 

So, you’ve got huge amounts of money disappearing, and then you’ve got loads of other players taking part in the value chain and getting a little slice of that advertiser spend. This also means that the ecosystem isn’t transparent at all. 

If an ad request comes in from a publisher, it’s like a game of pinball, with the request bouncing and rolling between all these different systems and events. And, across these systems, there’s no real standard, which is likely a large reason for that missing 15%.

This situation has also put agencies, which naturally use a DSP to make their programmatic purchases, under a lot of pressure from advertisers to find alternative models for buying publishing inventory that doesn’t result in similar loss.

Digital advertising, as a whole, also falls short because Facebook and Google control between 60 and 70% of the total online market. And this dominance has been detrimental to advertisers and publishers alike.

If you look at Facebook’s piece of the pie, for example, you have to remember that all of those ads are served on Facebook’s platforms. They don’t have a network and have effectively taken over the local publishers’ position. 

Addressing programmatic’s shortcomings

To deal with these problems, there has to be a system that reduces the number of intermediaries. A platform that mediates the entire auction, as opposed to having this, theoretically very positive, open ecosystem that just doesn’t work practically. 

The second thing is, when you ask ad buyers why they prefer programmatic advertising, most point to their ability to use data to target consumers in one way or another. However, that is all going away. Third-party cookies are getting binned. Firefox and Safari have already turned off third-party cookies within their browsers, and Chrome will belatedly follow suit in 2023. IDFA is now also optional on iOS – and most people choose not to be tracked. So, with all this third-party data disappearing and targeting using that data becoming more limited, are advertisers really going to continue to accept half of their budgets going to intermediaries rather than on actual media spending? So, logically, there has to be a system in place to enable advertisers to target people using first- and second- party data sources, while making sure more spend is ending up at its intended destination.

We’ve seen agency groups, such as GroupM and Omnicom, start working on what they call ‘curated marketplaces’ as a solution to the shortcomings of programmatic. These marketplaces shorten the value chain, so there are fewer systems involved. What they’re doing is essentially taking a buying platform and connecting directly to a publisher partner that would like to see some of that revenue. This is, of course, more transparent because there are fewer systems in the middle to distort goings on.

The Adnuntius offering

Adnuntius – founded in Norway, 2016 – delivers the same as these agency groups, but does so as a white label platform. The platform consists of four different components including a private marketplace, self-service advertising, a data management platform (DMP), and an ad server.

The private marketplace is where agencies are able to agree to connect with a publishing partner’s header bidding setup, or where a publisher can invite agencies to purchase its inventory. Spanish media group Prisa has partnered with Adnuntius to make publishing inventory available inside the supply side of the platform. They have then opened up to the demand-side, enabling them to log into a system that they control which, in turn, enables agency partners to buy in a way that all the money is accounted for and there is far less technology cost.

Adnuntius is also working with Norwegian independent media agency Try to establish a 100% transparent ecosystem, where both publishers and buyers can account for all money spent. Within this network, Try will not be the only buyer, and all buyers that join will pay the same price. 

Self-service advertising enables a publisher to open up their own self-service advertising portal and give small and medium-sized businesses the means to create ads and pay for them online themselves. It’s a direct relationship between the publisher and the advertiser, but it’s mediated by the Adnuntius platform.

The data platform is a DMP and CDP that’s tightly integrated into all of the other systems within the platform to ensure that publishers can activate their first-party data inside of said platform and then offer that as targeting criteria to monetise the data. This offers a workflow far more efficient than that within programmatic, where publisher-based audiences can only be activated through deals. 

This ecosystem also benefits from providing a platform for contextual targeting as an alternative to data-based targeting. Publishers have the ability to continue targeting users, who don’t opt-in to sharing their data, through contextual. This is incredibly important, as there is a growing number of people who are opting out of being tracked. 

For agencies, using a single marketplace platform can eliminate all the technology costs, other than the platform fee, while simultaneously covering the embarrassing 15% of unattributable spend. It does require them to adopt new processes, because agencies aren’t used to working in this way with their publishing partners, but it provides the answers they’re looking for as third-party data continues to be phased out. 

These agencies can form a one-time agreement with the publisher and have the publisher’s advertising traffic and data opened up to them, enabling the agency and the publisher to build up a joint repository of first-party data, where the publisher maintains full control and is able to pull back at any time. The agencies that explore this and join forces with publishers will get a long-lasting competitive advantage over the agencies that haven’t laid the groundwork for what’s to come. 

Problem solved

In programmatic, you have your SSP on one side and your DSP on the other side, but you also have measurement, viewability, and anti-fraud partners – and other systems – in between those two sides. What Adnuntius is doing is, rather than having this disconnected, open ecosystem, it’s providing one platform that mediates the entire auction from the publisher through to the buyer buying the publisher’s inventory. So, Adnuntius is responsible for making sure that there are no disappearing events or requests going over from the publisher’s side to the buy side. Also, if an impression happens, Adnuntius makes sure there is no loss of data going the other way. It can do that because it has both of the sides within one system, and it’s natively designed to do so.

At the end of the day, it all leads back to two main trends: programmatic advertising is largely ineffective when it comes to transparency and costs, and the third-party data is no longer there to protect those high costs. These issues have always existed, but the industry is now waking up to it. And it all puts publishers in pole position, because they’re the ones with the data that’s going to drive the future of the industry.