More than half of media experts say most digital advertising budgets are programmatic. How can agencies and marketers increase trust and transparency in their programmatic media buys?
In the last two years, digital marketing has advanced at a breakneck pace. Programmatic, the technology enabling advertisers to reach their audiences across multiple digital touchpoints and at scale, is at the heart of this transformation.
By 2022, programmatic is expected to account for a more significant portion of digital ad budgets, with formats such as CTV, OTT, and audio gaining traction. Experts predict that programmatic investment will skyrocket in the coming years due to the benefits of automation, real-time measurement, sophisticated targeting, and optimized ROI.
However, increased programmatic access means multiple paths to the same ad inventory, which leads to increased complexity and, ultimately, a wider gap for ad fraud.
Advertisers face substantial challenges due to a lack of transparency in the programmatic ecosystem and supply chain. P&G, one of the world’s largest advertisers, highlighted the issue of wasted ad dollars in 2017 when it decided to cut its digital ad spend by $200 million, only to see no significant change in business outcomes. Other prominent advertisers, such as Chase and Uber, came to similar conclusions across programmatic and mobile, respectively.
According to research, more than half of publishers have at least one supply path that experiences transaction failure. As newer and more profitable mediums enter the market, advertisers are asked to manage more inventory and participate in multiple auctions. This significantly raises the ad tech tax and the overall supply chain cost.
As a result, it only makes sense for brands to demand greater supply chain transparency to understand how and where their money is spent.
How can supply path optimization (SPO) re-establish lost trust?
SPO, in a nutshell, solves the problem of auction duplication while locating the most direct path to ad inventory. It also provides detailed auction mechanics, auction level metrics, and other data logs, resulting in improved auction efficiency and transparency. Furthermore, SPO reviews are an excellent way for marketers to strategically select partners who are known to provide value and are free of fraud while also providing them with a thorough understanding of what happens behind the scenes before deciding to invest further.
According to an OpenX study, marketers and agency participants are growing more confident in SPO reviews. More than half have conducted their first-ever SPO review in the last 18 months. As these tactics gain traction, ad buyers have indicated increasing their SPO efforts by collaborating with external consultants or utilizing supply path verification technologies.
This increase in SPO can be attributed to several factors, including increased adoption of header bidding by publishers, unauthorized reselling, changes in investment strategy, cookie-less environment, and IDFA.
So, who bears the brunt of the blame? The agency or the marketer?
To build trust in the complex programmatic world, brands must understand how each player in the supply chain operates. This can be accomplished if brands, technology partners, and agencies work together to develop data-sharing principles and standards to aid in SPO. Research revealed that brands and agencies disagree on who should be responsible for SPO and media quality. In comparison, 29 percent of brands and 38 percent of agencies believe that agencies are in charge of day-to-day SPO activities; 47 percent of brands and 38 percent of agencies believe that brands are in charge of these tasks. This disconnect emphasizes the importance of greater alignment among media buyers to fully reap the benefits of supply path optimization.
New technological solutions, such as supply path curation and marketplaces, are emerging. However, for SPO to reach its full potential, industry stakeholders must collaborate to define measurement metrics and transparency standards.
The Next Steps
Buyers can use SPO to control their purchasing paths and strengthen their supply relationships. The goal of SPO is for buyers to gain access to the inventory that is most important to them – consolidating around low-cost and transparent buying paths, ultimately increasing their purchasing power. The first step toward a successful SPO is understanding how brands and advertisers can achieve their desired business outcomes by collaborating with the right partners and pipes. Buyers can improve their campaign outcomes and return on ad spend in this manner.
Furthermore, to create a more transparent and innovative digital environment, we must first clarify the inner workings of the supply chain. For the first time, many buyers across the ecosystem are establishing relationships with SSPs and exchanges. As a result, they’ve begun to cultivate a more trusting relationship with sell-side programmatic players. One of the many ways SPO can help boost trust and transparency is through the ability to build trust with selected partners and differentiate between transparent and non-transparent participants.
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