ANA study finds 25% of programmatic ad dollars are wasted

Of the $88 billion spent on open web programmatic ads, $22 billion is wasteful or unproductive, a study by the Association of National Advertisers (ANA) found.

The ANA’s Programmatic Media Supply Chain Transparency Study focused on the open web ad market and did not address the opportunity of walled gardens. It included 21 marketers and 12 supply chain companies, and tracked $123 million in total ad spend with 35.5 billion impressions between September 2022 and January 2023.

The ANA study closely tracked the flow of dollars through the programmatic supply chain and found that only $0.36 of every dollar that enters a demand-side platform (DSP) reaches a consumer.

Where does it go?

• Around $0.29 goes toward fees to ad-tech intermediaries.
• Another $0.35 goes to low-quality media, including invalid traffic (IVT) and made-for-advertising (MFA), non-viewable and non-measurable inventory.
• While most supply-side platforms (SSPs) took less than 5% of the ad spend, one SSP in the study took close to 45 percent of media spend..

Dig deeper: Bid shading costing advertisers $6.6 billion yearly

The study found that if advertisers were able to measure and price inventory based on its quality, they could achieve an approximate 20% increase in ad spend productivity.

Other findings of the study include:

• MFA supply is growing. It represented approximately 5 percent of web auctions in early 2020 and grew to nearly 30 percent of all web auctions by mid-2023.
• The average number of websites and apps used for campaigns by the 21 marketer study participants was an astounding 44,000.
• Unlike rational markets, the study found little to no correlation between price and quality in the open web ad market.

Why we care. Ironically, in a marketing industry awash in data, it’s the lack of visibility and data that is partly to blame for the inefficiency. The data analyzed in the report is based on log-level data, a detailed record of everything about an impression.

If more advertisers accessed log-level data from the tech vendors across their supply chain and matched the data to show where value is hiding and where there is no value at all, the study found they could reduce the waste and get more bang for their buck.