The Association of National Advertisers yesterday released its first guide on programmatic media buying, a resource the organization said can save marketers billions of dollars a year. It’s the latest step in the trade association’s efforts to shed light on the more murky, and inefficient, parts of the buying and selling of media.
The CMO’s Guide to Programmatic Transparency offers recommendations on how to maximize investments, especially as the research points out that less than half of every dollar spent on programmatic channels actually goes to showing digital ads. Programmatic buying has grown in popularity as it allows advertisers to bid in real-time and target consumers across many devices and platforms, from YouTube to digital billboards.
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ANA estimates that 40% to 65% of every dollar goes to the publisher, with a lot of the money going into services that support programmatic buying. The association contends these recommendations could save marketers between $8 billion and $16 billion per year by showing them how to cut down on inefficiencies. As of 2021, more than $155 billion in ad spending gets conducted via programmatic every year, according to ANA.
Nick Primola, head of ANA’s CMO Global Growth Council that spearheaded this project, said it’s difficult for CMOs to keep up with the innovation and growth in programmatic media. It’s an area that even marketing leaders at top companies are trying to figure out, he added, and the 47-page guide represents the collective input from more than 30 contributors and partners sharing their lessons across brands, agencies and consultancies.
“Our goal is to help CMOs invest more in these areas and remove the limitations, creating more transparency,” Primola told Digiday. “The landscape they’re operating in is impossibly complicated.”
Tim Ringel, CEO of Meet the People, believes the finding of 40% to 65% of every dollar benefiting publishers may be even higher. The reality is publishers can make a lot of money out of this leftover inventory in the auction process, and many of them (such as Google or Facebook), are both the buyers and sellers in some cases.
“Inefficiency depends on how you look at it,” Ringel said. “[Programmatic] is absolutely a legitimate investment, but it depends what you are looking for … understand where the dollars go and ask the right questions.”
Many CMOs, Ringel added, either don’t know or don’t ask that question. They need to understand where their investment is running, whether that is the format of the ad or the site hosting it.
But it can be hard given the massive ecosystem. Per ANA, from 2011 to 2020 the marketing tech landscape has skyrocketed from some 150 vendors to about 8,000. And the finding is that most companies are currently paying more than they have to for their media supply chain. ANA argues a lot of that may be due to an overlap in providers and services, as well as the lack of transparency in the programmatic ad buying process as it’s developed in recent years.
“The ad-tech tax is high – that’s undeniable,” said Rachel Pasqua, CMO and global client marketing lead at Prohaska Consulting. “But there are ways to bring those costs down by understanding just what that ad-tech tax entails, and renegotiating and streamlining partnerships, vendors, etc.”
To ANA’s surprise, a lot of this material was not available, whether it was a basic glossary or more specific areas like service level agreements between marketers and mar-tech companies. The CMO guide gives real-life recommendations from contributors that have practical experience at major firms, including Aetna, IBM and PepsiCo. Primola said the hope is other leaders across the agency world and even academia can also benefit from it and help tackle the transparency issues.
“It’s more than a guide resource,” Primola said. “It is a community of learners. It’s really meant for CMOs, but also for CEOs of a supplier, or professor and deans of universities to have a good awareness of challenges and successes.”
As part of a larger initiative, ANA’s programmatic guide outlines steps necessary to build greater transparency with agencies and their partners, including how to break down expenses in the supply chain and approach suppliers and partners to create an ongoing process with the data. With each solution, there are prompts, examples and suggestions for internal discussion. The guide also provides resources on the programmatic media buying systems and their cost breakdowns.
The full guide is available for download to ANA members in the client-side marketer and platinum tiers, as well as the other gold, silver and individual members.
To Pasqua, there is no “silver bullet” when it comes to industry transparency. But part of the fix is to get educated buyers that can understand costs, negotiate and measure the right results.
“Meticulous accounting and painstaking attribution and measurement are the key to whittling down the aforementioned tech tax,” she said.
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