Saturday, February 24, 2024

Other Stories

Related Posts

Billion-Dollar Blindspots: The ANA Report’s Eye-Opening Revelations


In the complex world of digital advertising, the Association of National Advertisers (ANA) has released a groundbreaking report, shedding light on the often opaque and misunderstood intricacies of programmatic media buying. This detailed study, analyzing an impressive $123 million in advertising spend from notable brands such as State Farm, Mondelez, and Discover, spans the period from September 2022 to January 2023. It offers an unvarnished look at the realities of digital advertising, where the conventional wisdom about the relationship between the cost of media and its quality is turned on its head.

At the heart of the ANA’s findings is a startling disconnect: the quality of media impressions, those that are viewable, measurable, and non-fraudulent, does not dictate their market price. This revelation challenges the long-standing belief that higher quality should naturally command a higher cost. Instead, the report reveals a marketplace where the value proposition of digital advertising is misaligned, leading to significant inefficiencies and misplaced investments.

The inefficiency in the allocation of advertising resources is starkly highlighted by the report. Of every dollar invested in demand-side platforms, only 36 cents effectively reach the intended consumer. The remaining 64 cents are lost, with 29 cents going to ad-tech intermediaries and a disconcerting 35 cents wasted on low-quality media. This breakdown translates into a staggering $22 billion of the $88 billion open web programmatic ad spend being squandered, underscoring the need for more effective and strategic advertising practices.

These findings build on an earlier report from June, which kickstarted a crucial industry conversation about the prevalence of made-for-advertising (MFA) sites. That initial report revealed that 21% of impressions were directed to these low-value destinations, indicating a significant portion of advertising efforts were being misdirected.

A particularly concerning aspect of the ANA’s study is the evident gap in vendor participation. Bill Duggan of the ANA notes that although 67 advertisers were interested in participating, only 21 could legally secure the necessary log-level data from their vendors. This limitation highlights a broader issue of data ownership and accessibility in the digital advertising space. Many advertisers, despite funding the ad budgets, do not own or have contractual access to the data generated by their campaigns. This lack of transparency and collaboration is a significant hurdle in the quest for more efficient and accountable advertising practices. Notably, only three demand-side platforms (DSPs) – Adform, Adobe Advertising, and a third unnamed company – participated in the study, further emphasizing the reluctance within the industry to fully engage with transparency initiatives.

Chris Kane, founder of Jounce Media, emphasizes the importance of advertisers being well-acquainted with their suppliers. He points out that while knowing all suppliers is essential, there are scalable methods to manage these relationships, ensuring reach to the mid and long tail of high-quality content. This approach requires a more nuanced and sophisticated understanding of the digital advertising ecosystem and a willingness to adapt and refine strategies accordingly.

Wayne Blodwell of Impact Media offers a compelling analogy to describe the situation: “Blaming programmatic for the less than stellar ANA findings is like blaming the roads for drunk driving.” This comparison succinctly captures the need for greater accountability and responsibility among both buyers and sellers in the digital advertising industry.

The ANA’s report serves as a clarion call to the industry, urging a paradigm shift towards more strategic, data-driven decision-making. It highlights the urgent need for increased transparency, efficiency, and responsibility in programmatic advertising. As the industry continues to evolve, this report stands as a critical guide, directing advertisers toward more effective, efficient, and ethical media buying practices.

Beyond the stark revelations about inefficiencies and data disconnects, the ANA report also delves into the practical implications for advertisers and the industry at large. The study’s findings challenge advertisers to rethink not only their spending strategies but also their entire approach to digital advertising.

The report suggests a paradigm shift from a quantity-focused approach to one that prioritizes quality and efficiency. This shift is illustrated by the fact that while the average campaign in the study ran across an astonishing 44,000 websites, a disproportionate 63% of impressions came from just the top 500 sites. This statistic raises critical questions about the necessity and effectiveness of such a widespread reach. It mirrors an experiment by General Motors, which found no negative impact on performance when reducing its advertising reach from 800,000 websites to a more focused range of 4,000-15,000 websites. This finding suggests that a more targeted approach, focusing on fewer but higher-quality sites, could be more effective and efficient.

Another key aspect of the report is its examination of private marketplaces (PMPs). The study found that larger PMPs, with over 500 domains, are nearly as problematic as the open web, with a significant proportion of impressions going to MFA sites. In contrast, smaller PMPs demonstrate better control and efficiency, indicating that a more selective approach in PMPs could lead to better advertising outcomes.

The ANA’s findings underscore the importance of vetting publishers and establishing direct relationships with media sellers. The report advocates for a reduction in the number of supply-side platform (SSP) contracts and suggests that brands streamline their vendor lists to between five and seven vendors. This recommendation aims to reduce complexity and improve transparency in the programmatic supply chain.

Bill Duggan of the ANA also highlights the importance of specialized roles within companies, such as a chief media officer, to oversee and navigate the complexities of online ad spending. This suggestion reflects the growing recognition that digital advertising requires specialized knowledge and skills to manage effectively.

The report’s implications extend beyond individual advertisers to the industry as a whole. It calls for greater collaboration and transparency among all stakeholders, including advertisers, vendors, and intermediaries. This collaborative approach is essential for addressing the systemic issues highlighted in the report and for moving the industry towards a more sustainable and effective future.

Pesach Lattin
Pesach Lattinhttp://www.adotat.com
Pesach "Pace" Lattin is one of the top experts in interactive advertising, affiliate marketing. Pesach Lattin is known for his dedication to ethics in marketing, and focus on compliance and fraud in the industry, and has written numerous articles for publications from MediaPost, ClickZ, ADOTAS and his own blogs.

What's your opinion?

Popular Articles

Don't Miss