NDA recently partnered with adtech company Adnuntius to hold a roundtable discussing the state of the programmatic ecosystem. We heard the thoughts of Chris Daniels, Chief Revenue Officer at Haymarket Automotive; Piers North, Chief Revenue Officer at Reach; Guillaume Périé, Programmatic Lead, EMEA at The Wall Street Journal | Barron’s Group; Faisal Karmali, Senior Director of International Business Operations at WarnerMedia; Jo Holdway, Chief Data & Marketing Officer at The Independent; Alex Kirby, Global Head of Programmatic and Commercial Data at Dennis; and Stian Remaad, Chief Executive Officer at Adnuntius.
Last year, ISBA, AOP, and PwC released a report that came as a bit of a wake-up call to the industry, showing that only 51% of advertiser spend is received by publishers on average, while 15% of spend seemingly disappears into thin air.
In the 18 months since then, however, it can be argued that little progress has been made, and publishers are continuing to miss out.
“That study showed that there are areas of the supply chain that we don’t know what’s going on with, and so the push for transparency was absolutely right. It might have upset some ad tech partners of ours, but the whole point of it was to bring the issue to the surface and go, ‘look, this is the state of the digital advertising supply chain. It’s not in great shape, so let’s do something about it’,” said The Independent’s Holdaway.
“How far we’ve got down that road, I’m not sure. I know there is a working group looking at it. But, as far as I’m concerned, it looks like it’s getting a little bit muffled, which I’m worried about. It’s vitally important for us to keep focus on it, because that’s going to be a key part of the digital trading’s success in the future, so it needs to be sorted out.”
The Wall Street Journal | Barron’s Group’s Périé points to the duplication of partners within the supply chain as being a big reason for the transparency issues, and believes the solution to the problem lies in the whole industry working collaboratively to clean it up.
“What’s the answer? I don’t think we’ll find it today,” he said. “But publishers, whether small or large, need to work with consultancies, industry bodies and alliances to make sure that we all choose the right partners. It will only by everyone taking responsibility and doing their due diligence that we will make strides in achieving transparency.
“There are some endeavours that are quite good, such as sellers.json, ads.txt, the clean rooms, and potentially some blockchain solutions. I think those are a few avenues that we can explore to solve this.”
Publishers may have to look at potentially ‘turning off’ certain partners, even if they “make you a bit of money”, according to Dennis’ Kirby.
The problem is it’s very difficult to unpick what some players are doing in the market and even more complex to understand the nuances of the supply chain.” she explained. “It’s important for us to scruitanise our partners a bit more, It shouldn’t really impact the bottom line because there’s a lot of really good supply out there.”
Karmali agrees, adding that it’s up to publishers to “try to vet and really be careful about who we work with”. However, he’s in disbelief that none of the SSPs or DSPs have managed to come up with a solution yet.
“I’m surprised there’s not one SSP or DSP partner who’s just been like, ‘you know what? I’m going to get this perfectly right. And then everyone will come to us’. What will happen behind that is that, even if the margins go for everyone else, they’ll have to keep up with that piece of technology. That’s what I’ve been hoping for,” Karmali shared.
Nonetheless, he appreciates the publisher-only tools that have been developed by the likes of Sourcepoint and RedBud in giving publishers a more “clear view of what we’re looking at when we work with a partner”.
Not seeing clearly
Though the ‘Programmatic Supply Chain Transparency Study’ presented some worrying statistics for the programmatic industry, it’s findings can be scrutinised, and there are possibly some inaccuracies.
“I think that 51% is probably an incorrect number. If you look at how much inventory is lost between the ad servers, from a discrepancy point of view, there’s probably another 15% knocking around in there just from the inventory that you’ve served that an ad hasn’t been delivered against. That pass back is essentially useless,” said Haymarket’s Daniels, adding that he doesn’t think the technology companies within the supply chain are being fraudulent – they’re just lacking understanding of the problem.
“I think it’s because there are so many people in that chain,” he continued. “There are so many layers that are having to be passed through so, essentially, the ecosystem is completely stacked against us.”
Reach’s North also has his doubts about the accuracy of the report’s findings, though he instead points to the 15% ‘unknown delta’ as being questionable.
“My takeaway was: does this 15% really exist? We’re not quite sure. It’s definitely not fraud. I think there’s a danger that publishers can be a little bit too navel-gazing. We all want to go back to the days when publishers, effectively, owned a monopoly on the ad business. We’re struggling to readjust to the world,” said North.
“At the end of the day, the advertisers are what you need to work on. We all have choices.”
Despite this, North acknowledges there is a problem with transparency – he just thinks the industry is looking at it in entirely the wrong way.
“We all want to know the pounds and the pence. But, at the end of the day, the banana farmer in Equatorial Guinea doesn’t know where the margins are going on his bananas in Waitrose,” he added.
“You have to look carefully at your own business to make sure that you’re across exactly what you’re getting from every partner. Are they delivering you value? If they are delivering you value, then crack on. There’s a risk that we hold out for this extra money that we think we’re owed, like we have some right to that money. Does it exist? I don’t know. If it does, who’s to say it’s not going to be spent and reinvested in other media?”
What’s the solution?
Whether you believe in the report’s findings or not, everybody can agree there is an issue with transparency within the programmatic supply chain. That transparency problem comes down to two main reasons, according to Remaad: the number of players in the chain, and the lack of standards in the industry around whether ad requests are being delivered correctly. And Remaad believes that this can all be addressed by cutting out most of the middlemen in the supply chain
“It’s a question of who will actually monitor this? Who will take responsibility for the industry actually cleaning up? The problem isn’t one partner or one technology player in the value chain, it’s the industry – or ecosystem – as a whole,” Remaad stated. “It’s a big problem, because you don’t really have anything, or anyone, you can hold particularly accountable.
“Our approach to this is that we actually need to reduce the number of intermediaries, so that we can actually be responsible for the whole value chain,” he continued. “When we take responsibility for the whole value chain, we bring that unknown delta and the extra cost down to zero. So, there’s no problem if you take control of the whole value chain. The problem appears when you are one of the many players in the ecosystem.”