According to Statista, global programmatic ad spending will reach $617 billion in 2024, growing over 20% year-over-year.
The unabated growth of this sector is quite amazing when one considers the findings from the Association of National Advertisers’ (ANA) recent study on the programmatic supply chain. Consider the following observations from their research:
- Only 36% of a programmatic dollar invested via a DSP effectively reach a consumer.
- 29% of each dollar goes to cover DSP and SSP fees.
- Nearly 35% of every dollar is spent on fraudulent, non-viewable, MFA or non-measurable traffic.
Ironically, the ANA study is not revelatory in nature, rather it has reaffirmed what the industry has known for several years… this sector of the media market is fraught with risk and inefficiencies for advertisers. Yet programmatic accounts for nearly three-quarters of digital media spend.
While there is no silver bullet to cure these ills, the ANA made two key recommendations that advertisers may want to consider:
- Reduce the number of SSPs utilized – The study found that media teams were utilizing between 9 and 53 SSPs. The report authors stated their belief that 5 to 7 SSPs would be optimal.
- Cut the excessive use of programmatic partners – Researchers found that the average number of websites purchased averaged 44,000 per campaign. The report authors recommend reducing that number to 75 to 100 “trusted programmatic partners” to provide media buying teams with access to the premium inventory they seek.
According to the ANA, implementing steps such as these could result in “savings of up to 25% the media dollars spent using ad tech on the open web.”
One thing is clear, considering the ANA’s report… media buying teams will need to consider altering their approach to mitigate advertiser risk and boost the return on their programmatic media investment.