THE STATE OF PROGRAMMATIC ADVERTISING - Truth

1 THE STATE O F PROGRAMMATIC ADVERTISING IN PARTNERSHIP WITH2TH E STATE O F PROGRAMMATIC ADVERTISING All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without prior permission in writing from the publisher. : +44 (0)207 193 4600 London Research 2018 Linus GregoriadisDirector, London ResearchLinus is an experienced digital marketing analyst who spent more than a decade setting up and building the research function at Econsultancy, a digital research and training company now owned by Centaur Media. After leaving Econsultancy, where he oversaw the production of hundreds of survey-based trends reports, buyers guides and best practice guides, he launched ClickZ Intelligence for B2B media company Contentive.

2 London Research, founded in 2017, is a sister company to Digital Doughnut, the world s largest community of marketers and digital professionals. Michael NutleyInteractive Media & Marketing SpecialistMichael is a freelance writer specialising in interactive media and marketing. He was head of content for between 2012 and 2016, and during that time edited the European channel of Adobe s website. Before that he was editor of New Media Age, the UK s leading news publication for interactive business from 2000 to 2007, and its editor-in-chief from 2007 to 2011. He has written widely about the sector, is a regular speaker in the media and at conferences, and has lectured on the future of ADVERTISING and publishing at the London College of foreword 3 Executive summary 4 PROGRAMMATIC ADVERTISING : waking up to the reality 5 The black box problem and the need for greater transparency 8 The trust gap widens as traditional agencies struggle to adapt 13 Lack of standards and inconsistent measurement plague industry 18 Appendix profile of respondents 221234 ABOUT THE AUTHORSCONTENTSL ondon Research, set up by former Econsultancy research director Linus Gregoriadis, is focused on producing research-based content for B2B audiences.

3 We are based in London, but our approach and outlook are very much international. We work predominantly, but not exclusively, with marketing technology (martech) vendors and agencies seeking to tell a compelling story based on robust research and insightful data part of Communitize Ltd, we work closely with our sister companies Digital Doughnut (a global community of more than million marketers) and Demand Exchange (a lead generation platform), both to syndicate our research and generate high-quality get in touch if you think we can help. Truth is TMG s global media planning and buying offering. Truth is a different and more client centric way of briefing, planning, buying and delivering all types media. We do this by offering a truly transparent single view of campaigns delivering the right consumers, in the right environments at the right budget.

4 We operate under a single fully disclosed fee and your ADVERTISING spend will reach their intended destinations fully intact. No unwelcome surprises. No black boxes. No grey areas. Nothing but the say hello if you want to find out +44 (0)207 193 4600 London Research 20183TH E STATE O F PROGRAMMATIC ADVERTISING Foreword by TRUTHS ince the birth of the commercial internet, adtech providers, ad networks, self-serving agencies, slow-moving industry regulators, adblockers and inaccurate data sources have all made things increasingly difficult for advertisers and users to get the best experience. Because this conversation is happening everywhere in our industry (and it is not just limited to digital media), we chose to conduct this research in partnership with London Research to add some qualitative insights, and to quantify opinion relating to the STATE of PROGRAMMATIC ADVERTISING .

5 We feel that advertisers need to connect with their users in the right environments at the right time with the right message, while users need to be treated with respect and delivered an ADVERTISING experience they can benefit from. It feels that with so little revenue in the PROGRAMMATIC pathway reaching publishers, the stakeholder that is being let down the most is the consumer. We want to be part of the thinking and the movement to redress this used to be the case that media buying agencies competed on service and insight rather than price, but as price came more to the fore, a race to the bottom began. The agency market began to consolidate, and the power of buying media was concentrated into the hands of the few. This has led to agencies devolving their services to third parties, meaning they have less control of the route to market their campaigns take via PROGRAMMATIC media pathways.

6 Less control has meant exploitation by others, and more third parties joining the chain. As the third-party supply chain has grown, so has the level of mistrust within the the language adopted by the industry has created complexity and Truth , we believe there needs to be a reset. A reset that enables publishers to believe in the strength of their brands and get paid on time by advertisers. A reset where the middlemen (taking significant commissions) are either removed from the ecosystem or incorporated into a single manageable and transparent offering. A reset where advertisers can trust once again the delivery systems they employ to deliver their valuable brand message to consumers. A reset where consumers get a fairer value exchange for consumption of ADVERTISING . A reset where a trading platform for ADVERTISING is highly secure and where both consumers and advertisers data is protected and used in isolation.

7 A reset where the right things are tracked, recorded, verified and need for this reset is industry-wide and is being called for from all research has been undertaken to give advertisers the chance to share their voice and their frustrations, and to give the industry the opportunity to work us bring a better, fairer, ADVERTISING experience for all to the s about time we all took care of it and we feel that the research presented here will bring you to similar GrahamCEO, TMG plcMary Keane DawsonCEO, TRUTHAdam HopkinsonCOO, : +44 (0)207 193 4600 London Research 20184TH E STATE O F PROGRAMMATIC ADVERTISING Executive summaryProgrammatic is a term that describes a range of platforms, tools and services that have made digital ADVERTISING more automated and data-driven. While advertisers and agencies have reaped the benefits of a more targeted and scientific approach to display ADVERTISING activities, ad tech companies have proliferated, with question marks raised about the value being added by agencies and third parties at different stages of an increasingly complicated and sometimes murky brands have now lost faith in the transparency and honesty of the display ADVERTISING ecosystem, and have concerns about the proportion of their ad spend that translates into media seen by the consumer.

8 These issues are exacerbated by well-documented instances of ad fraud, and the damage to brands caused by association with inappropriate and sometimes even disturbing content. This research based on interviews with senior marketers at well-known brands and a global survey of more than 100 senior executives with responsibility for ad buying highlights the crisis in confidence that is undermining the PROGRAMMATIC ADVERTISING findings from this research include: A lack of value chain transparency. Almost eight in ten respondents indicate they have worries over levels of transparency in PROGRAMMATIC ADVERTISING (79%), while only a small minority (14%) strongly agree they have a good understanding of the proportion of their budget that makes it to the consumer. Thirty-nine per cent of advertisers surveyed regard lack of visibility on third parties as one of their biggest industry concerns.

9 Low levels of trust in agencies. Many advertisers perceive a lack of agency transparency (42%) as a top-three concern, an issue that is regarded as the second biggest headache for advertisers. More than a third of respondents (36%) to the survey cite medium or quite low levels of trust in their digital media agencies, while more than a quarter (27%) say they have felt compelled to use media agency services that are not in their best interests. Inconsistent measurement is undermining the industry. Around half (49%) of survey respondents cite a lack of consistent metrics and measurement as one of their biggest concerns. The industry still has its work cut out to ensure consistency of standards and metrics, and that these are agreed and adhered to. There is light at the end of the tunnel. Despite concerns about lack of transparency and issues such as ad fraud and brand safety, advertisers are confident that there are ways of addressing the industry s challenges.

10 More than two-thirds of respondents (70%) say they are taking action to improve their confidence in PROGRAMMATIC ADVERTISING , and more than three-quarters (77%) agree that a cleaner supply chain will release time and money for better ADVERTISING and innovation. A range of measures are being taken by brands both internally and in co-operation with agency and ad tech partners to bolster management of PROGRAMMATIC ad buying. MethodologyThis research is based on interviews with senior marketers at well-known brands, and a global survey of 102 senior executives with responsibility for ad buying at large companies with annual revenues of at least $50 million a year. The survey, which was conducted in November 2017, was completed by members of Digital Doughnut s million-strong community of marketers and digital professionals.