Shawn Lim
Mar 21, 2024

Billions in ad revenue untapped due to inefficient programmatic advertising: What needs to change?

Presently, investment in programmatic media does not provide advertisers with the reach and viewability they are paying for. We ask experts how marketers should navigate problems such as made-for-advertising websites.

Billions in ad revenue untapped due to inefficient programmatic advertising: What needs to change?

In the first part of the Association of National Advertisers’ (ANA) study on the transparency of programmatic media-supply chains, Campaign published an analysis on how a desire for low-cost advertising gave birth to made-for-advertising (MFA) websites and continues to fuel them despite efforts by agencies and verification firms to clean up automated ad platforms.

The second part of the study, released in December 2023, found that investment in inefficient programmatic advertising across the open web has caused marketers to miss out on $22 billion in potential ad revenue.

Through transaction costs and poor metrics, the study revealed only 36 cents of every dollar that enters a demand-side platform (DSP) effectively reaches consumers. Over a third (35%) of each ad dollar is wasted on non-viewable and invalid traffic impressions, non-measurable for viewability, and made-for-advertising websites.

A further 29% of each ad dollar goes towards transaction costs, primarily DSP and supply-side platform (SSP) costs, indicating a troublesome amount of wasted expenditure. The current average number of SSPs used by advertisers is 19.


With the report identifying little correlation between price and ad quality, investment in programmatic media does not give advertisers the reach and viewability they are paying for.

It is important to note that major DSPs like The Trade Desk, Google's DV360, and Amazon DSP declined to participate in the survey. Only Adform, Adobe Advertising and another DSP that declined to be identified took part.

Brands like Kimberly-Clark, Mondelez, Walgreen’s, State Farm, Shell, Nissan, Dell, HP took part in the study.

Campaign breaks down the second part of the report with industry experts to determine how advertisers can use the ANA report to rectify inefficiencies.

Evaluating and choosing the right SSPs

In the second part of its report, the ANA recommended that advertisers reduce the number of SSPs being used to a maximum of seven.

However, in the dynamic landscape of programmatic advertising, where there is a choice of SSPs, the challenge for brands lies in choosing the most effective and qualitative avenues.

Hannah Mirza, founder and chief executive at The Responsible Marketing Agency, points out that the suitable SSP suppliers for each client will vary based on price, exclusive inventory pools, and data solutions. 

“Helping clients run a fair and unbiased RFI and RFP process to streamline their SSP ecosystem will become a critical workstream we support on the back of these findings in 2024,” Mirza tells Campaign.

Kevin Geffray, vice president of paid media at Jellyfish, tells Campaign he recommends brands to align with SSPs that resonate with their target audience, both existing and potential customers. He explains that prioritising SSPs offering exclusive access to publisher inventories where a concentrated audience ensures a more targeted and impactful outreach.

In addition, brands also need to regularly audit the overall quality of inventories within selected SSPs, which is essential for building enduring partnerships.


Geffray adds that brands can do this by leveraging campaign data and KPIs as well as conducting experiments on attention, over-exposure, and performance impact to ensure a comprehensive evaluation. Centralising investments across fewer partners enhances efficiency and strengthens collaboration.

“Recognising the dynamic nature of technology and the industry, we emphasise the need for iterative strategies,” says Geffray.

“Anticipating changes such as cookie deprecation, new formats, or emerging channels requires a proactive test framework. Onboarding and auditing one or two partners annually allow brands to explore new opportunities and stay ahead of industry shifts.”

Enhancing transparency and reducing unnecessary expenditure

With the ANA report highlighting approximately $22 billion in waste within the open web programmatic market, there are still brands that have not pivoted to entirely private marketplaces, given the risk of unseen impressions and further brand safety and suitability controls.

“Although this presents a significant initial undertaking, the long-term gains outweigh the initial outlay to establish a quality-controlled future-buying pool,” explains Mirza.

The primary challenge lies in re-educating advertisers about the true worth of ad placements that positively influence brand perception, capture attention, and drive incremental sales.

Stanislas Albin, media strategy director for Singapore at Jellyfish, tells Campaign that premium inventory is understandably more expensive because it involves compensating a team of skilled journalists to create high-quality content, and the integration of ads into such environments is seamless, exclusive, and easily viewable. This level of quality comes at a price.

Conversely, MFA websites often duplicate content from other sources without cost, as their web pages resemble cluttered Christmas trees adorned with excessive ads, making it nearly impossible to focus on any particular one.




These ads frequently auto-refresh, some even sticking over the content, making accidental clicks unavoidable. While these tactics, unfortunately, fall within legal boundaries, they allow MFAs to achieve extremely low CPMs (cost-per-thousand impressions) with high interaction rates, primarily due to forced or erroneous clicks.

However, Albin says it is essential to recognise that despite these enticing KPIs, ads displayed on these websites can harm brands in the long term.

Albin notes that many advertisers tend to prioritise and sometimes are incentivised to pursue short-term quantitative KPIs, such as click-through and conversion rates, rather than qualitative ones, like visit-duration, ad-awareness, or purchase-intent lift.

Premium ad placements consistently outperform these qualitative criteria, which means the critical selection criteria for choosing a website should revolve around the quality of content and ad integration. This approach reflects how users are likely to accept and engage with ads.

“For a significant period, achieving low-cost, short-term quantitative KPIs has been the cornerstone of influential players like Criteo in remarketing and performance models like the Google Display Network (GDN), which optimises towards cost-per-click,” explains Albin.

“Regrettably, these KPIs have, for some advertisers, become the benchmark despite not truly representing the actual cost of a high-impact advertisement.”

To combat media wastage and regain control, Geffray urges brands to navigate the entire programmatic media workflow—from strategic media planning and campaign implementation to monitoring and reporting.

He says that this journey commences with the meticulous selection of inventories, ensuring a strategic avoidance of non-transparent options like partner networks available on DSPs.

Employing pre-bid solutions to block bids targeting non-viewable inventories maximises media impact on secure placements.

“Brands should have ownership over and leverage the full capabilities of their adtech stack with a steadfast commitment to transparency,” adds Geffray.

“Central to this philosophy is understanding the supply path and real-time optimisation, the linchpin to achieving complete transparency and tracking every expenditure back to tangible business outcomes. Supply Path Optimisation (SPO) products should unravel the entire chain of intermediaries between the bid and the final URL.”

Geffray continues: “This data is then integrated into bidding algorithms, ensuring the utilisation of the most cost-effective and impactful route for delivering on a specific website, thereby providing clarity in the process and avoiding bidding against the same inventories, contributing to inflated CPMs.”

Preventing the compromise of ad quality and audience relevance

In its report, ANA also found that $10 billion of programmatic waste accrues to MFA as MFA domain owners considerably understand three core components of site monetisation—SEO, advertising performance metrics, and price point arbitrage.

Users’ experiences are seamless when they go directly to an MFA domain from a search engine or browser, which has been intricately planned by MFA domain owners.

Alexander Taylor, head of partnerships at Picnic, tells Campaign that the real version of their site and what the majority of their traffic sees, is if a user ends up on the domain via a social link or native advertising link or if a user goes direct but gets three to four pages into the site.

Taylor explains this is where the publisher has loaded the page with as many highly viewable video and display placements that hit adtech’s vanity metrics like viewability, dwell time, and view-through rates at a price point significantly lower than any competitor publisher.


“So, whether any given site is or isn’t MFA is highly subjective. The best way to avoid MFA domains is to use a partner who audits all of their publisher partners for the following key MFA indicators: percentage of non-direct traffic, ad density, user bounce rates, average pages per visit, and, importantly, emissions,” adds Taylor.

“Agencies should prioritise authentic engagement metrics to begin steering away from MFA sites. No performance metric is perfect in silo. Therefore, we should look to combine several metrics to paint a clearer picture of MFA domains.”

Geffray points out that despite initiatives such as ads.txt, pixalate, TAG (Trustworthy Accountability Group), and ad verification tools, they may not comprehensively solve the MFA problem, and might still allow these fraudulent practices to persist. Even curated marketplaces, evolving towards performance packages, can inadvertently facilitate MFAs.

Geffray encourages agencies to implement stringent guidelines for their clients. He explains that at Jellyfish, the agency uses its bidding solution, J+ Bidding, in conjunction with brand safety partners to purchase URLs compliant with brand safety guidelines agreed upon with its clients.

The future landscape of programmatic buying

Brands navigating the complexities of open web transparency and walled gardens should adopt strategies that align with the evolving programmatic landscape.

Adopting adaptive strategies involves a proactive commitment to openness, from selecting compliant URLs to implementing robust brand safety guidelines. Brands can further future-proof their strategies by actively participating in industry-wide initiatives that promote transparency and accountability. Collaborative efforts and partnerships with trusted SSPs and tech partners can empower brands to stay ahead of industry changes.

Ultimately, brands should prioritise flexibility by regularly auditing and optimising their programmatic strategies to ensure they can adeptly navigate the challenges and opportunities presented by the open web and walled gardens.


The emphasis on SPO and stringent brand-safety measures will play a central role in ensuring advertisers have clear visibility of the entire supply chain, fostering trust and accountability.

The complexities of walled gardens pose unique challenges and opportunities for brands in programmatic buying. While these closed ecosystems offer unparalleled access to vast user data, they also limit transparency, making it crucial for brands to strike a balance.

Brands should also consider a diversified approach, combining the strengths of walled gardens with open web strategies.

“Building solid partnerships with walled gardens remains essential, bringing access to more data and enabling custom integration to gain visibility on inventories and audiences,” explains Geffray.

“As the industry evolves, brands should constantly audit and adapt their strategies to extract maximum value from walled gardens while maintaining transparency and control.”

Source:
Campaign Asia

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