Post-ISBA, mid-crisis we still need to address programmatic supply chain

With some fanfare and no-little delay, ISBA has published a new study into programmatic advertising. The report found that about half – at best – of leading brands’ programmatic spend actually reaches publishers. The rest is eroded along the supply chain. This echoes the findings of a study we ran with Ebiquity, the US Association of National Advertisers (ANA), the Association of Canadian Advertisers and AdFin in 2017.

Programmatic is growing fast. By the end of next year, Zenith predicts that 72% of all digital display advertising worldwide will be sold programmatically, a total of $147bn. It is clear from the focus of the ISBA report – like our own a few years back – that advertisers need to look well beyond the transaction level when it comes to programmatic. The use of so-called inventory and proprietary media to hide the net cost of media has grown fast.



This could become an increasingly-significant issue for advertisers if media agencies now find themselves needing to sell off this inventory – inventory bought upfront and at agencies’ own risk – owing to the widespread decrease in client spend during the pandemic. Brand owners need to consider whether inventory is being recommended for their own benefit rather than for the agency’s.

Advertisers should also look out for the challenges related to media benefits that agencies should – contract permitting – share with them. Added to this is the industry-wide use of multiple, different and often confusing terms to describe what are all essentially benefits that should accrue to brands: AVBs, rebates, value pots, service level agreements, free space and so on.

Recent reports about agency group contracts with third-party ad tech vendors in the programmatic media supply chain – from supply-side platforms to ad exchanges – have only served to intensify criticism levelled at ad holding companies about alternative revenue streams. The elongated, and still relatively opaque supply chain presents parties with vested self-interest the opportunity to become a part of the supply chain, often with advertisers unaware.

While it’s important to keep the spotlight on the endemic lack of transparency in the programmatic media supply chain, on one level the ISBA study has told us nothing new. Its headline finding reiterates the challenges we identified three years ago in our study with the ANA and others. Now – as then – many advertiser-agency contracts do not facilitate a transparent trading ecosystem. It is clear that we need a concerted and coordinated industry effort to drive transparency into this ever-more dominant means of media trading. This effort needs to be underpinned by straightforward, transparent contracts which cover all commercial activities. For that continued focus of the spotlight, we welcome the ISBA report.


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