In 2018, a group of premium advertisers asked "where does my programmatic ad spend go?"

After 2 years of research, investigators concluded that, for 15% of supply chain costs, the answer was: "no one knows."

Compare that to the retail industry. Shrinkage (loss due to theft; admin errors, bad pricing, and fraud) remains stable at ~1.4% of sales. The ad industry's shrinkage is ten times higher.

More mind-boggling, researchers at PwC were only able to successfully analyse a fraction of the impressions included within the study. An enormous 236 million impressions could not be mapped due to "low quality data".

So, given that the study wasn't able to work with a complete dataset and worked only with reputable companies, it is almost certain that the average amount of unidentified waste in programmatic ad spend is higher than 15%. To its credit, the PwC report acknowledges this:

โ€œThe unknown delta averaged 15% of advertiser spend, ranging from 0% to 86%, with the majority from 2% to 23%.โ€

In the retail industry, the 1.4% shrinkage is tolerated because it relates to physical goods and human processes, and it is therefore hard to reduce to zero without significant expense.

Stating the obvious, programmatic advertising is entirely digital. Therefore, the target for waste across the supply chain should be well below the retail industry.

Zero waste should be an achievable goal

So why is it so high? The report lists a number of 'challenges' most in the industry will be familiar with: a Byzantine supply chain, poor data formatting, black box contracts, etc... All issues highlighted 4 years ago in the AMAโ€™s 2016 report: 'Programmatic: Seeing Through the Financial Fog'.

While the PwC report ends by sternly warning that 'robust governance and compliance programmes' are needed and with the hope that the study 'can be a positive catalyst for change,' our view is that the industry is not capable of the level of change needed to resolve systemic issues and, if left to their own devices, the next 4 years will be like the last.

When designing Glimpse, we wanted to make sure advertisers had absolute certainty over how their budgets were spent. In our platform, advertisers won't have to commission PwC for 2 years to see what their spend delivers. Our system is fully auditable and open for advertisers to interrogate - giving maximum assurance.

To find out more โ€ฆ

๐Ÿ‘‰ Visit our Website

๐Ÿฆ Follow us on Twitter

๐Ÿ‘” Find us on LinkedIn