BOCA RATON, FL: Inefficiency and complexity in the digital ecosystem are hurting both brands and publishers financially, according to a senior industry figure.
Bob Liodice, president/ceo of the Association of National Advertisers (ANA), discussed this subject during his keynote at the organisation's 2014 Media Leadership Conference in Boca Raton.
He told delegates that a variety of issues – like click fraud, bots, piracy and viewability – are exerting a pernicious influence on advertising through new media channels. (For more, including the need for cross-platform metrics, read Warc's exclusive report: ANA chief: Media ecosystem has yet to assimilate change.)
More specifically, he asserted that these and similar forms of interactive inefficiency are "causing us to lose about 25% of the roughly $30+ billion that is being spent on digital media."
In dollar terms, that 30% translates into approximately $7.5 billion – funds that should instead be driving a tangible return on investment for brands.
Such problems, he suggested, result from "a level of infection throughout the digital media ecosystem that is really disrupting our ability to invest with great confidence and capability."
Liodice also drew on data from the World Federation of Advertisers, a membership group for major marketers, which pointed to the fact that just 55% of digital expenditure is ultimately received by publishers.
The remaining 45% is taken by intermediaries including agency trading desks, demand-side platforms and exchanges.
"To some, this is a conservative estimate," Liodice added. "I've seen estimates that range to only 30 cents are given to the publishers."
Losses of this kind, he added, stem from "a substantial amount of erosion within the supply chain that you would never, ever see in the traditional media forms of television, radio and print."
Data sourced from Warc