Nick Manning of MMC: New ANA Programmatic study – why only advertisers can solve the problem

We’ve now seen the latest report from an advertiser trade body to shine a critical light on the ineffectiveness of online display advertising on the Open Web.

Previous studies from the World Federation of Advertisers (WFA) in 2014, the ANA in 2017 and ISBA in 2020 and 2022 described the dramatic loss of value that advertisers experience in the supply-chain of ad tech providers.

The latest study, from the US Association of National Advertisers, goes further than its predecessors in calculating the total loss of value and effectiveness once shortfalls in actual ad exposure are included.

Advertisers lose 64% of their investment in transactional costs and poor ad exposure through low viewability, ad fraud and other factors limiting effective delivery of an audience. If attention metrics were applied, even more value may be lost.

If people who entrust an investment house to look after their savings saw a loss of 64% in the value of their savings year-in, year-out, they would move to a different advisor.

In the programmatic world, the sad truth is that the average advertiser only sees 36 pence in the pound of value regardless of their chosen agency and supply path.

Another report, another set of damning statistics and that silence you hear is the media agency reaction. You won’t have heard from the ad tech operators yet and as for the publishers….no, nothing there either.

We shouldn’t be surprised given that there was no reaction to any of the previous reports and even the 2016 bombshell report into media transparency from the ANA in 2016 produced only private responses and inevitably some rather half-hearted denials.

Once upon a time, the job of the media agencies was to look after the best interests of their advertiser clients and make their money work harder. They managed the client’s money and worked with partners downstream to maximise value and advertising effectiveness. Everyone won when the advertiser won.

Not any more. The media agencies, ad tech operators, data companies and publishers all take their share of the budget before an ad goes out, and then take no responsibility for the value loss through poor visibility. They all get paid whatever the outcome.

They are all involved in trading arrangements with each other that do not work in the advertiser’s favour.

The only way that advertisers can solve this problem is to take control themselves. This doesn’t mean that they should take media in-house as some have proposed; they don’t have to reinvent the wheel.

Instead they have to choose partners who will provide transparency, shorten the supply-path and genuinely use data and technology to enhance performance, not turning one pound into 36p but adding value and delivering a strong return.

All of this is achievable with willing partners, the right terms-of-trade, contracts and tracking and audit protocols.

The new ANA report provides great guidance as to how this can be achieved, and its advice on what kind of inventory to buy, how much to buy and how to construct positive frameworks is hugely helpful.

However, what advertisers need more than anything else is their own people who are very knowledgeable in programmatic and who can work with selected execution and independent tracking and audit partners to implement the ANA playbooks.

After several studies and 10 years into the programmatic world, we cannot expect the supply-side, including the media agencies to reform this dysfunctional industry. It’s too lucrative.

Only the advertisers can solve this and since all-industry change is not going to happen due to the resistance of the supply-side, each advertiser has to do it for themselves.

The ANA study gives them a lot of help to do this.

Nick Manning is non-executive chairman of Media Marketing Compliance.