Fact Check: 10 takeouts from commentary on ISBA’s ‘Supply Chain Study’

Last week, ISBA released its ‘Supply Chain Transparency' study with PwC, mapping the programmatic supply chain from end to end. A number of our members voluntarily took part in the research, with the results showing that more work is needed to improve transparency in the supply chain. 

Collaboration is central to achieving this and we’re committed to working with our members and industry partners to shine a light on the value added at each stage of the programmatic process. To ensure that we can collectively make constructive progress, we need to be clear on the facts. Here we've analysed some of the commentary relating to the study. 

Half of online ad spending goes to industry middlemen
Fact check: According to the latest IAB/PwC Digital Adspend report, total UK spend amounted to £15.7 billion in 2019 and 39% (£6.2 billion) was invested in display. Of this, an estimated 89% or £5.5 billion was spent programmatically, according to eMarketer. This means the scope of this study is roughly one third of all online ad spend.

Brands lose 50% of the money they invest in programmatic ads 
Fact check: This suggests that 50% of the money that advertisers invest in programmatic advertising never reaches its intended destination and is simply lost - discounting the fact that ad tech companies are the intended destination for a portion of that 50%. Ad tech delivers essential functions such as brand safety controls, targeting and accurate measurement, all of which works to make brands’ spend more effective. Our long-term objective at the IAB remains to work toward  increasing transparency within the ecosystem, so that the value of ad tech can be accurately evaluated. 

The supply chain has been deliberately designed with opacity in mind
Fact check: Programmatic advertising has matured quickly, rapidly becoming the future of many ATL channels such as OOH, TV and audio. While this has brought with it many benefits, it has also clearly led to a certain degree of complexity within parts of the industry. It’s for this reason that industry standards are continuing to develop and evolve - including incorporating sellers.json and OpenRTB SupplyChain Object into the Gold Standard. 

About half of so-called premium advertising goes to publishers, the rest is something of a mystery
Fact check: ISBA’s study shows that 85% of spend in digital advertising can be accounted for. 15% is currently ‘unknown’ and, as the report identifies, there are a number of factors that could be contributing to this - such as foreign exchange translations, limitations in data sets and post-auction financing arrangements. Further investigation of this is crucial and is already underway via a specific industry taskforce, including industry bodies such as the IAB, ISBA, AOP and IPA.

These market abuses deprive the publishers of their lifeblood
Fact check: From publishers’ perspective, programmatic advertising was created to make the buying process more efficient. As a result, they are able to monetise impressions on a scale that wouldn’t otherwise be possible. In tandem with improved transparency within ad tech, there also needs to be improved understanding from advertisers on how to best use the technology available to support publishers - for example, utilising a sophisticated approach to brand safety rather than relying on basic keyword blocking. 

Digital marketing sees the 49% of their advertising spend that does not go on advertising as the price of progress 
Fact check: A proportion of the 49% of spend cited here does go on advertising - paying for the services that optimise the performance of brands’ digital ads (take a look at our guide here). It’s crucial to increase transparency so that brands can identify where this value is being added and maximise it. 

Businesses benefit from the comparative lack of transparency and would like to keep it that way
Fact check: The voluntary involvement of many ad tech companies in ISBA’s study is a clear demonstration of their commitment to delivering transparency within the supply chain. The same goes for their involvement with industry standards such as the Gold Standard, JICWEBS and TAG, as well as completing and maintaining publicly available Transparency FAQs.  

The market is infamous for its opacity and the murkiness of the supply chain has been laid bare
Fact check: Programmatic delivers many benefits, is undoubtedly complex and, despite progress, we need to continue to improve transparency within it. However, taking a balanced approach in which we recognise and support the benefits of programmatic advertising is needed if we’re to protect our ability to fund, produce and access content. 

The findings complement the ICO’s ‘Update report’, which criticised the real-time bidding trading system
Fact check: This isn’t inaccurate, but benefits from being put into context. In the months since the ICO’s report was published, the digital ad industry has responded with a robust action plan. The willingness of so many of our members - ad tech included - to collaborate and get involved with our work in this area has been essential to driving forward our ongoing work to deliver change - as recognised by the ICO. 

[The study] forensically confirms that conventional 'adtech' is opaque and largely immeasurable, despite its intrusive tracking - Johnny Ryan, Chief Policy & Industry Relations Officer, Brave 
Fact check: To successfully build on our understanding in this area and achieve a greater degree of industry transparency, cross-industry collaboration is essential. No single commercial offering can deliver this and the value of impartial commentators is paramount.