Marketers must tell their boards '60% of programmatic spend is wasted'

Ebiquity has urged marketers to face up to the fact that 60 percent of their programmatic ad spend is being wasted because of the "ever more complex" media supply chain and problems with fraud and viewability.

Michael Higgins, the chairman of Ebiquity, a media auditor and pitch consultant which advises about 80 of the world's top 100 advertisers, sounded the warning at the company’s annual results.

He said: "It is a striking fact that today only about 40 percent of digital programmatic advertising investment reaches the consumer, with value being eroded by the multiple links between advertisers and publishers, fraud, lack of viewability and non-human traffic.

"I don't envy any business leader who has to tell his board and shareholders that they're investing in anything that suffers up to 60 percent wastage.The trouble is, that's what many CMOs should be saying."

Higgins, a former partner at KPMG, said the rise of technology "has helped make the broad marketing ecosystem ever-more complex, inevitably more confusing, and often less transparent than one might expect".

Ebiquity advised the Association of National Advertisers in its investigation into "non-transparent" business practices at US media agencies last year.

The annual results show the company spent £285,000 of its own money on "the transparency work performed for the US Association of National Advertisers".

Higgins was optimistic that Ebiquity can prosper because "our clients – the world's biggest advertisers –  need more help than ever from an independent firm with the necessary knowledge and expertise to navigate their way through this".

He added: "Our independence is paramount, and we must remain at the heart of the marketing ecosystem, enabling marketers to seize the opportunities offered by digital."

Ebiquity’s compliance arm, Firm Decisions, clashed with WPP’s Group M last year.

The world’s biggest advertising group filed a court claim, alleging "misuse" of confidential documents by Firm Decisions, which rejected any suggestion of wrongdoing.

The two sides agreed to end the dispute last week after ten months, without the case going to trial.

Ebiquity reported annual revenue grew 9.1 percent to £83.6 million and underlying operating profit increased 4.4 percent to £13 million.