A report into the supply chains of the UK’s £2 billion ‘premium’ programmatic advertising market has shown that 15 per cent of all spend is taken up by ‘middle men’, while only half of investment makes it to publishers. It has long been known that money leaks exist, but this is the first time that anywhere in the world advertisers have fully quantified its end-to-end value.
The report, published by UK trade body for advertisers, the ISBA, the Association of Online Publishers (AOP) and auditor PwC, shows that on average publishers only receive 51 per cent of advertiser spend while 15 per cent of spend – an “unknown delta”, representing around one-third of supply chain costs – could not be attributed to any extent.
The investigation showed that 10 per cent of spend goes on demand side technology, demand side and supply side platforms each represent an eight per cent cut and agency fees comprise seven per cent of spend. A large number of tech companies and supply chains operated in the programmatic space, creating a complex market that is extremely hard to audit.
PwC said it took more than a year to even obtain the data.
Yet despite the market’s now infamous opacity, most advertising is now digital and almost 90 per cent of digital display ads are traded programmatically. Responding to the report’s findings, major advertisers have warned that the market is in desperate need of standards and transparency and they may take their money elsewhere if the matter is not resolved.
Brands involved in the study include Unilever, HSBC, Disney, BT Group and Nestlé. To compile the report, PwC collected data from 15 advertisers, eight agencies, five demand side platforms (DSPs), six supply side platforms (SSPs) and 12 publishers, representing an estimated £0.1 billion of UK programmatic media spend.
For more on the report, click on https://www.isba.org.uk/knowledge/digital-media/programmatic-supply-chain-transparency-study/
