The latest programmatic supply chain report from ISBA and PwC has been released and it shows some improvements for transparency in the programmatic supply chain.

Back in 2020 when the study was first carried out, 15% of spend was unattributable and PwC were unable to establish exactly where this money was going. This became the ‘unknown delta’ and caused a significant backlash within the programmatic industry.

The latest 2023 update from PwC shows that this ‘unknown delta’ has been reduced to 3%. Yet still only 65p in every programmatic pound is being spent on media. The rest is spent on data and technology fees. So, does that represent good value for advertisers? Here at the7stars, we think not.

Stack it high and sell it cheap!

One thing the latest programmatic report lays bare is the superiority of Private Marketplace (PMP) trading compared to the long tail of Open Exchange trading. The average matching of impressions is more than 65% and this makes PMP considerably more accurate. Yet the programmatic industry continues to be obsessed with laying data and technology onto long tail, non-premium inventory and selling this to advertisers with hefty mark-ups (whether these are undisclosed or otherwise).

Tech Tax

Technology costs on both demand and supply side are significant and can often account for over 20p in every pound spent by a programmatic advertiser. This is more than an agency is paid to plan, buy and optimise the campaign. What incremental benefit are these technologies bringing and are they being fully utilised? Furthermore, can the technology stack be simplified, and more money spent on media?

Data has to add value

Data usage and application is another area that requires more scrutiny and rigour. It’s easy to overlay datasets within programmatic campaigns without really understanding the value that the data is bringing to campaigns. The focus should be on high quality datasets that add value to premium inventory and deliver campaign performance uplifts that justify the investment.

To serve or not to serve

One thing that PwC’s report does not account for is the environmental impact of running spray-and-pray programmatic campaigns, with the overuse of technology and data. The industry needs to start taking sustainability seriously and KPIs should be baked into every programmatic campaign.

What the report really shows is that there is still a considerable way to go to deliver a level of transparency that builds confidence and long-term growth in the sector. Programmatic advertisers should still be demanding more from their agencies, tech vendors and media partners. All three need to be held accountable not just for full transparency on programmatic fees, data and technology, but also for the value these are adding to campaigns, and for their environmental impact.