On May 18, the Association of National Advertisers (ANA) released a critical study under a joint initiative led by Ad/Fin in cooperation with the ANA, the Association of Canadian Advertisers (ACA), and Ebiquity.  The study investigated the transparency and economics of programmatic media; particularly what percentage of an advertiser's programmatic media spend actually went to "working" media (compared to supply chain data and transaction fees taken by the media agency, trading desk, demand-side-platform and supply-side platform).  Here are some key takeaways:

 – The project analyzed more than 16 billion media impressions purchased on behalf of 7 major advertisers.

– Across the full supply chain, the overall ratio of "working" to "non-working" spend was found to be 58/42 percent. In other words, for every dollar spent by an advertiser, only 58 cents actually purchased media inventory while 42 percent was lost as a "programmatic tech tax."  Earlier studies reported the tax to be as high as 60%.  Regardless, it's far too high.

– Another key takeaway was not from the advertisers that participated, but from the advertisers that did not participate.  The 7 participating advertisers represented the exception rather than the rule when it came to an advertiser's ability to access and analyze programmatic data.  Due to a myriad of legal, technical and process roadblocks set up by players in programmatic advertising supply chain, 88% of advertisers interested and 75% of advertisers that signed up for the study could not (or chose not to) move ahead.

– Notwithstanding the excuses proffered to prevent or thwart access to data, the study establishes that those obstacles are not insurmountable as the 7 advertisers that participated prove.   The study shows that programmatic media buying can be transparent, accountable, measurable and auditable if advertisers take a few key steps and take control of their log level transaction data.

– The study lays out an 11 point playbook to help advertisers get better programmatic transparency and accountability. Following these suggestions will help advertisers better negotiate contracts and insure the level of transparency enjoyed by the advertisers who did participate in the study.

This article is presented for informational purposes only and is not intended to constitute legal advice.