ANA's Programmatic Media Supply Chain Study, December 2023; Déjà Vu All Over Again

Overview of the ANA ReportKey FindingsTransparency The report sheds light on the continued lack of transparency in the programmatic advertising ecosystem This includes hidden costs and fees making it difficult for advertisers to understand where their advertising dollars are going ANA and TrustNet have launched a transparency certification program to highlight the good actors this year vs the bad but not surprisingly none of the big DSP names are on it as they have little reason to lower margin or show where they take it which is creating green space for companies like Octillion and AdFormQuality vs Cost A significant emphasis is placed on the tendency of advertisers to favor lower CPMs often at the expense of ad quality and placement This has been a long standing issue especially for larger hold co39s who are winning business on the basis of reducing fee39s while losing sight of the key business drivers and business impact that chasing quality over price provideImpact on Ad Effectiveness The report suggests that this preference for cheaper options can lead to reduced ad effectiveness harming longterm brand value especially since there is more and more MFA made for advertising pages and chasing low cost will inevitably land you in MFA landUnderstanding Programmatic AdvertisingThe Mechanismamp8226Automated BuyingSelling Programmatic advertising uses algorithms and technology to buy and sell ad space in realtimeamp8226DataDriven It leverages consumer data to target ads more effectivelyBenefitsamp8226Efficiency and Scalability It allows advertisers to reach a wider audience quickly and efficientlyamp8226Targeting Capabilities Enhanced targeting leads to theoretically better ad performanceThe Problem of Misaligned IncentivesCheap CPMs Over Valueamp8226Shortterm Cost Savings Advertisers often chase lower CPMs to reduce immediate advertising costsamp8226Neglect of Ad Quality This approach can lead to the neglect of the quality of ad placements such as the context and the environment in which the ad is displayedImpact on Advertisers and Brandsamp8226Reduced Ad Effectiveness Poor ad placements can lead to lower engagement and brand recallamp8226Brand Safety Concerns Ads appearing in nonpremium or inappropriate contexts can harm the brand39s reputationCase Studies and ExamplesNegative Outcomesamp8226Case Study 1 An example where an advertiser prioritized cheap CPMs resulting in ads placed in lowquality environments leading to brand damageamp8226Case Study 2 A comparison between two campaigns one prioritizing low CPMs and the other prioritizing premium placements highlighting the difference in ROI and brand perceptionStrategies for Alignment of IncentivesEmphasizing Value over Costamp8226Quality Metrics Encouraging advertisers to consider metrics beyond CPM like engagement rates business outcomes viewability and brand safetyamp8226Longterm Brand Value Focusing on how premium ad placements can enhance longterm brand value and customer loyaltyTransparency and Educationamp8226Understanding the Supply Chain There is no excuse to be an under educated buyer today There is an abundance of information and partners like Octillion and AdForm who are leading the way on transparency can help advertisers better understand the complexities of the programmatic supply chain to make more informed decisionsamp8226Demanding Transparency Advertisers must demand greater transparency from their media partners including access to audited loglevel data to ensure you understand the source of media from a supply path perspective the cost of media the middlemen or other hidden fees being levied and more Adtech creates and adds tremendous value but the days of taking margin of 35100 are over or should be and buyers must demand more to ensure they get what they expectToo often I speak to procurement or media execs who think they are paying a very low take rate for programmatic media and lose sight of or do not take into account the costs of API39s bidshading data or inventory markups or other hidden fees that are allowing large public companies to report earnings of 60200 It is impossible that you are paying a low take rate and somehow all of their other buyers are the ones paying the 50200 extra Everyone is paying more and unless you are an informed and intelligent buyer you too will be contributing to the billions in waste the ANA spoke aboutConclusionThe ANA39s report must be a wakeup call for the advertising industry highlighting the pitfalls of misaligned incentives in programmatic advertising It underscores the importance of prioritizing quality and value over mere costsaving measures As the digital advertising landscape continues to evolve it is imperative for advertisers to realign their strategies focusing on longterm brand value and effective consumer engagement rather than shortterm cost efficiencies and align with partners who share their incentives for successBuyers most widely impacted are those in the local and midmarket media space who have been buying from smaller agencies or resellers of large DSP39s and multinational and Global brands buying from the large DSP39s who do not understand their fee structures or who are focused on the wrong pieces of these fees due to a lack of information Education is powerPosted at MediaVillage through the Thought Leadership selfpublishing platformClick the social buttons to share this story with colleagues and friendsThe opinions expressed here are the author39s views and do not necessarily represent the views of MediaVillageorgMyersBizNet

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ANA's Programmatic Media Supply Chain Study, December 2023; Déjà Vu All Over Again

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ANA's Programmatic Media Supply Chain Study, December 2023; Déjà Vu All Over Again

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