Marketers and advertisers have been calling for transparency into their advertising investments – from planning to activation, measurement and optimization – for years. Yet, by and large, the lack of transparency has been accepted as the status quo: While we’ve made strides, data remains fragmented – operationalized and accessed on behalf of marketers, rather than with them.
But a recent report from the Association of National Advertisers (ANA) has finally put a dollar figure on the cost of less-than-ideal visibility: The study estimates that lack of transparency leads to $22 billion in wasted investments – roughly 25% of ad spend – every year.
That quantified economic impact should light a fire under advertisers. Now is the time to reject the status quo. Marketers can seize this opportunity to demand transparency and seek out partners that can deliver – or risk being left behind on the sidelines of media inefficiency.
ANA finds 1 in 4 ad dollars are wasted because of transparency gaps
The ANA’s second-annual Programmatic Media Supply Chain Transparency Study investigated the intricate tangle of players and layers on the open web, which comprises a $90 billion chunk of the digital ad ecosystem in annual advertiser spend, according to the ANA. The ANA conducted the study via 12 advertising supply chain companies, including Adform.
The headline figure from the study is that one in every four advertising dollars spent on the open web is wasted, totaling a troublesome $22 billion annually in misdirected ad spend. The ANA dug into this problem, identifying three main transparency gaps: data strategy, data access and information asymmetry.
The wasted spending is just one of many findings that illuminate the transparency gaps across the digital ad ecosystem.
In a fitting twist, the broad lack of transparency was a limiting factor in the sample size of the study itself: Of the 67 ANA member companies offered the opportunity to participate in the report, only 21 did. Why? Because other 46 advertising organizations were unable to access log data from their ad tech partners.
And while another recent study by YouGov showed that 9 in 10 (89%) of US marketers want to be informed about how their media budget is allocated, the ANA study found just 6% of marketers are “very comfortable” with the level of transparency they receive with their programmatic media investments.
Marketers should use ANA report as leverage to change the game
Remarking on these widely acknowledged transparency issues, David Cohen, CEO at IAB, noted, “this is not somebody else’s problem. Marketers, you need to get engaged, get educated, get involved. This is something that everyone needs to be fluent and conversant in. … Get in the game.”
While this notion speaks volumes to the way the lack of transparency has historically been accepted as the status quo, I argue it’s time marketers do more than get in the game; they need to change the game. And this ANA report gives marketers the fuel to demand change – putting a hard, monetary figure behind the necessity and urgency of gaining greater visibility to direct smarter, more effective ad spend.
For years, nearly every player in the industry has proclaimed its transparency as a currency for trust and investment. But the report adds objective traction to what advertisers have increasingly experienced: a lack of action behind all the transparency rhetoric.
Partners truly committed to transparency are out there – there are players already giving marketers the valuable visibility they need. Marketers can help to identify and elevate these diamonds in the rough by being clear, confident and uncompromising in demanding transparency from their partners and the industry at large.
Ultimately, the ad tech landscape exists to serve principals. Our success is solely dependent on yours. So, rather than feeling dismayed by the ANA’s quantification of the negative impacts of poor transparency, advertisers should feel empowered and emboldened: It’s time to change the game. The ball is in your court. What better time than now?
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