The Association of National Advertisers has named PricewaterhouseCoopers as the lead agency of its planned investigation into how marketers’ media budgets are distributed among the ad tech supply chain, a sector of the industry that is “hobbled by mind-numbing complexity.”PwC won the contract after an RFP kicked off a competitive pitch that kicked off earlier this year and ultimately attracted more than 20 parties to the process. The consultancy remains on course to publish its findings in October.
Investigative firm Kroll and TAG, an information sharing and analysis organization co-created by the 4A’s, ANA, and IAB will also be involved in the study.
In a statement, Bob Liodice, chief executive of the ANA, described the ad tech supply chain as “riddled with material issues, including a lack of transparency, fractured accountability, and mind-numbing complexity.” He added, “These issues impair critical decision-making, leading to wasteful and unproductive media-buying decisions.”
The investigation will consist of two phases; the first is scheduled to kick off this month and examine how advertisers’ budgets are distributed among programmatic players across the open web, while phase two will investigate the ad tech set-up within the industry’s walled gardens.
Derek Baker, principal, marketing and media transformation, at PwC, told Digiday the planned study will also seek to explore, or “dimensionalize” as he put it, how different media models impact transparency levels. He explained, further, “So, how does the supply chain look for brands that exclusively use [media] agencies versus brands that might have in-house teams executing the buys.”
Baker further detailed how PwC is on course to publish the results of its findings in October at the ANA Masters of Marketing Conference with the company also planning to draw up guidelines on how marketers can better minimize waste in their online media spend.
With digital continuing to account for an ever-growing share of brands’ advertising budgets — eMarketer forecasts spend to grow from $455 billion this year to near $646 billion by 2024 — accurately assessing the ROI of such investments is crucial for marketers. This is especially the case now that many marketers have their employers’ procurement departments peering over their shoulders.
Previous studies had limited impact
Observers of this sector of the industry will also recall how a 2016 ANA transparency study, conducted by K2, unearthed non-disclosed practices among brands’ media supply-chain caused much rancor among marketers. And more recently, a study conducted by PwC along with ISBA, the U.K. trade body that most resembles the ANA, found that, on average, for every £1 an advertiser spent via the programmatic ecosystem, around half that amount — 51 pence — made it to the end publisher.
PwC’s Baker told Digiday the upcoming study will take a more comprehensive look at how each tier of the ad tech ecosystem absorbs marketers’ budgets. “If you look at the first ANA study, it primarily focused on the demand-side, and the ISBA study looked at demand- and the supply-side,” he said. “We’re going to look at demand-, supply-, and ad quality for verification. So we really want to go all the way from brand advertiser to audience and understand what that full supply chain looks like and where the value is to advertisers and where the gaps are.”
Baker further described how many marketers have been limited in their ability to act upon the findings of previous transparency studies, despite their frustrations, simply because they’re confused on how to shake up the status quo without causing too much of a disruption to their day-to-day media operations.
“I don’t think that there has been a lot of tangible actions that advertisers have taken, because, oftentimes, the tools and techniques don’t exist in the marketplace today for advertisers to get that level of transparency,” he added. “That’s the challenge that advertisers have right now … that’s where this study is going to differ is because we’re actually going to outline what are the tools and techniques that brands can use to take action.”
A key component of the 2020 ISBA study was the observation of a “15% unknown delta” whereby auditors were unable to attribute just which tier of the industry had laid claim to marketers’ media investments. This was, in part, due to low levels of match rates (12%) when the auditing team attempted to compare log-level campaign data across the supply chain.
Speaking with Digiday, Mike Zaneis, CEO of TAG, explained how his outfit intends to use distributed ledger technology, known as TrustNet, to track which tier of the ecosystem is pocketing media spend in a manner that better facilitates accountability. TrustNet, a DLT that is powered by Fiducia, was piloted in a 2020 trial (separate to ISBA and PwC’s study) with several blue-chip advertisers such as Johnson & Johnson, McDonald’s, and Nestlé, that attempted to demonstrate the role automated technologies can play in marketers’ supply-path optimization efforts.
“We put advertisers’ spend through our DLT system, and what that allows us to do is then track, at an impression level, from marketer to publisher,” Zaneis added. “So, we can see what the take-rate is, for example, at the agency, DSP and SSP. It also allows us to track if an ad impression was viewable, brand-safe or whether it was generated by inhuman or human traffic.”