The ignominy of online advertising reached some kind of wretched crescendo in 2021 as a report emerged detailing how advertisers are being fucked blind by the adtech industry.
The ISBA (the U.K. equivalent of the ANA) released a report on a study, conducted over a two-year period by consultants PwC, that laid out the absurd wastefulness of the adtech industry. The study was conducted to establish what component of an ad budget spent on programmatic online advertising actually results in advertising.
Fifteen major advertisers, including Disney, Unilever and Nestlé participated in the study as well as eight agencies, five DSPs, six SSPs, and twelve publishers. Also participating in the project were adtech companies Google DV360 and Ad Manager, Amazon Advertising, and the Rubicon Project. The PwC leader of the study said,“It’s important to realise that this study represents the most premium parts ... the highest profile advertisers, publishers, agencies and adtech.”. Here are some highlights:
- Half of programmatic ad money is being siphoned off by the adtech industry before it reaches publishers.
- According to the Financial Times, of the 50% of the budget that was siphoned off, about 1/3 of the dollars, “were completely untraceable.” In some cases the untraceable costs were as high as 83%. This means the money just evaporated into the adtech black box without a trace.
- Only 12% of the ad dollars were completely transparent and traceable. An astounding 88% of dollars could not be traced from end to end.
From the director-general of the ISBA, “The market is damn near impenetrable.”
Remember, this study only reported on the highest quality tip of the iceberg; the most premium end of the programmatic marketplace. Imagine what the numbers must be like in the rest of the adtech cesspool where most advertisers swim their laps.
With the release of this study, all the usual clowns and apologists for the online ad industry seem to have suddenly disappeared. I haven’t heard anything from the wankers who usually hurl abuse at those of us trying to shine a light on the scourge of programmatic baloney. I’m sure they’re down in their basements busy working on logic-torturing excuses.
One exception is the always reliable IAB. Listen to this bullshit from an IAB spokesweasel, "... it is not a dark art and we shouldn’t lose sight of the crucial role programmatic plays in supporting our ad-funded, open web.”
Bullshit. As usual from these creeps, this is utter nonsense. The good things we get from the web are supported by advertising, NOT adtech, not programmatic horseshit, not dodgy middlemen.
And here's the even worse news. Just because 50% of your ad budget is reaching publishers doesn’t mean you’re getting 50% of value from your ad investment. Let’s not forget the fraud in the programmatic ecosystem, which the ISBA report doesn’t address. Once half your money escapes from the adtech jungle and gets to a publisher, it is still exposed to creepy “publishers” who hang around the programmatic playground.
As fraud expert Dr. Augustine Fou says, “ ... the 50% that makes it through to publishers could still be subject to fraud if that publisher is buying traffic and doing other shitty things like refreshing the page every 10 seconds, refreshing the ad slot every 2 seconds, stacking 10 ads on top of each other, loading 1,000 hidden ads in the background. The advertiser is still exposed to the potential of 100% fraud if that publisher is a fake site using fake traffic, and selling their inventory through the adtech plumbing.”
In other words, the programmatic advertising ecosystem exposes advertisers to double jeopardy. First is the 50% of your investment you surrender to middlemen, then there are the other flavors of online jeopardy — fraud, MFAs, viewability issues, etc. In our next exciting episode we'll see how much real advertising a programmatic ad dollar actually buys.
The adtech industry, and its supplicants in the agency business, will claim that adtech earns its money by "adding value"—by helping you find the most effective plan for investing your advertising dollars. Really? Do you pay your stock broker a 50% commission for similar services? Even a "digital strategist" wouldn't be that fucking stupid.
What effect will the ISBA report have on the ad industry? Zero.
Just like with ad fraud and privacy abuse, the ad industry is far too invested in the status quo to do anything about the black hole of programmatic. Agencies, who are supposed to be the experts who protect advertisers from wasting ad dollars, universally utilize and often profit from the programmatic black box and frequently have a financial interest in it.
By next month this whole thing will be buried and forgotten.