PwC research finds ‘positive and welcome improvements’ in programmatic supply chain

The new year is beginning with some good news for brands and agencies buying advertising programmatically. The notoriously murky—some might say verging on impenetrable—programmatic supply chain is becoming more transparent and understandable.

Two years ago, a landmark study from the British advertising trade group ISBA and consulting firm PwC concluded that just 51% of every dollar spent in programmatic made it to publishers, with the rest being skimmed off by the multiple intermediaries along the supply chain between advertiser and publisher. Even worse, 15% of each dollar could not be accounted for.

The results from a follow-up study show that 65% of ad spend now makes it to publishers, and the “unknown delta” is down to just 3%.

Along with the release of the findings in 2020, ISBA called for changes to the industry—including further investigation into the “unknown delta,” and more standardization across contractual and technology areas to facilitate data sharing and drive transparency.

Last February, ISBA also released a financial audit toolkit for programmatic advertising, meant to provide advertisers and publishers with industry recognized standards to begin auditing their programmatic supply chains.

The new findings indicate “positive and welcome improvements,” with greater standardization having a number of benefits.

While non-standardized data makes it difficult to match DSP bids made to SSP impressions delivered, the DSP-to-SSP match rate of just 12% in 2020 improved to 58% this year. The study authors said the fact more adtech vendors could provide log level, rather than aggregate data, was a key factor in the much-improved match rate.

“Overall, we very much welcome these findings,” said Clare O’Brien, ISBA’s head of media, according to VideoWeek. “The match rate improvements alone, reflect the reforms which have already been implemented throughout the programmatic supply chain by some vendors and agencies in the last two years.”

More standardization and other efforts to clean up the system also made it much easier for researchers to conduct the study—which required just nine months this year, compared to 18 months in 2020—and helps explain the reduction in the unknown delta.

“That the unattributable delta in this specific study was reduced to 3% provides the industry with the proof point that confirms that transparent practice works for all stakeholders,” said O’Brien.

However, researchers also found that while the unknown was about 3% in open marketplaces, it fell to less than 1% in private marketplaces.

“In summary, the positive results of the 2022 study are significant and demonstrate the operational potential of the Toolkit,” concluded the authors. “They also highlight the improvements in data quality, access and products implemented by many adtech vendors in response to the original study.”

David Brown