ISBA report points to programmatic’s missing billions

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Programatic advertising is important for publishers (including MAA) but we’ve always wondered where the rest of the money goes.

According to a new study by PwC commissioned by UK advertiser body ISBA, about half – at best – of so-called premium advertising (big brands like Unilever and Nestlé, about £2bn in the UK) goes to publishers, the rest – well that’s something of a mystery.

PwC reckons that from every £1 spent by an advertiser, about half goes to a publisher, roughly 16p to advertising platforms, 11p to other technology companies and seven per cent to agencies. For many publishers it’s probably much less. Adtech companies that took part in the study included Google’s dv360 and Ad Manager, Amazon Advertising and the Rubicon Project.

ISBA director-general Phil Smith says “The market is damn near impenetrable. As you start to break down the value chain for the impressions we have matched, the erosion of value is really significant.”

He says the 15 per cent of untraceable spending is “really shocking” and demonstrates the need for more shared standards and transparency.

Jon Mew of the IAB (Interactive Advertising Bureau) told the FT programmatic advertising was “complex and relies on many companies to play a part. However, it is not a dark art and we shouldn’t lose sight of the crucial role programmatic plays in supporting our ad-funded, open web.”

Hmmm. Now we can seen why ad tech companies find it so easy to raise money and rent big yachts at Cannes.

Update

In advertising’s real world ITV’s ad revenue dropped 42% in April, far worse than the company forecast back in March but hardly a surprise with the Covid-19 lockdown bringing the UK economy to a halt. Its shares actually rose. May numbers will be more revealing.

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