Where does your online advertising spend really go?

The background

“Programmatic”, or automated, internet advertising is worth £2 billion in the UK annually. Advertisers can see what they pay for adverts, and publishers (websites) can see what they receive as revenue, but between these two ends of the supply chain is a complex world of agencies and advertising technology (adtech).

Prior to spring 2020, no one in the world had ever mapped this process from start to finish. Who was actually receiving each advertiser’s money? That changed when our PwC team of advertising experts, data scientists and qualified auditors took on this significant challenge: to deliver transparency across the programmatic supply chain. Our results were published in May 2020.

Key findings included that, on average, only half of the advertiser’s money reaches the publisher and that 15% of advertiser spend is contractually unattributable.

The team’s research, The ISBA Programmatic Supply Chain Transparency Study, has had significant implications for the advertising industry. The study has been widely publicised, including in The Financial Times and the worldwide trade press. It has been shortlisted for many awards and recently scooped three at the 2020 Media Research Group awards: Best Innovation, Best Collaboration, and Best Trade Body Research.

Here’s Sam Tomlinson, the lead partner for the study, sharing what he has learned since the report was first published.


The real story is the challenges with data access and data quality

Much of the coverage and commentary has focused on the "unknown delta" (the 15% of unattributable spend), but the more fundamental story is the myriad issues with data access and data quality. From when the advertisers, agencies and publishers signed up, it took nine months to gather the data from the tech vendors.

Many of these delays were related to the complex permissioning and re-permissioning required to grant legal access to the data. Each individual component of the supply chain was behaving rationally, but the result is systemic irrationality - it should take a few days, not nine months, for advertisers and publishers to access and share their own data.

Without industry-wide protocols around data access and data quality, the unknown delta will remain exactly that: unknown.


Whatever is driving the unknown delta, it isn't classic ad fraud

All our experience in programmatic has indicated to us that the ecosystem is messy, not Machiavellian - it's simply grown very fast in the past decade, and governance is still catching up. Our guess is that the delta is the aggregate effect of multiple causes, each individually contributing only a few percent, which aggregates to the 15%. The only way to know for sure is to first resolve the aforementioned data access and data quality issues.


Programmatic is already successful, with the potential to be even better

There is no question that programmatic is here to stay. All of us involved in the study are pro programmatic, provided it's done well. As a brand or agency, if programmatic is already working well for you, then the 15% delta should be seen as good news: it means an already-successful channel could potentially be 15% even better.

Next steps: The taskforce will require collaboration and international support to succeed

In response to the study, an industry taskforce has been convened, aiming to drive standardised protocols around data access and data quality. For this to succeed, it will require collaboration from all involved in the UK, together with international assistance. The early signs are promising. We remain optimistic that this study will be a positive catalyst for industry change.

Contact us

Sam Tomlinson

Sam Tomlinson

UK Media and Entertainment Leader, PwC United Kingdom

Tel: +44 (0)7811 453111

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