Get a demo Do I subscribe? News sign-up
Print

Brands seek programmatic transparency

News, 31 January 2017
Topics

GLOBAL: As programmatic ad buying matures, the world's biggest brands are seeking greater control and transparency, primarily through the review of existing contracts rather than bringing the work in house, new research suggests.

The World Federation of Advertisers (WFA) surveyed 59 member companies, representing 18 industry sectors with a total global ad spend in excess of $70bn, and reported that these were spending increasing amounts of money through programmatic.

An average of 16% of digital ad spend is now programmatic, it said, compared to 10% in 2014.

Agency Trading Desks (ATDs) – media buying groups working within advertising agencies – continue to be the dominant model for programmatic ad buying, used by 40% of respondents. And combining shares of respondents who use ATDs as their principal model with those who use them in select markets, produced a total of more than 70%.

But the report added that these approaches are not mutually exclusive and said that Independent Trading Desks (ITDs) – those not owned by a media agency or communication group – represented an equivalent total of almost half of respondents (46%).

And, it stated, the most striking finding from the research is that alternatives to Agency Trading Desks (ATDs) are growing rapidly: ITDs have seen usage increase by 12 percentage points, compared to the previous wave of WFA's programmatic research in 2014.

In-house or 'hybrid' models, meanwhile, were used by more than a fifth of respondents.

Underpinning the evolution of digital ad trading models has been a drive to secure additional transparency, according to the WFA.

While 29% of respondents said they were satisfied with the level of transparency provided by their ATD (up from 21% in 2014), transparency at ITDs satisfied nearly half of users (up from 36% in 2014).

Six in ten advertisers were uncomfortable with the idea that agencies and holding companies should act as principal in the media buy – able to mark up inventory they have acquired in direct deals with media owners before selling it on to brands – and this is an area most want to see clarified.

Nearly 90% of advertisers are reviewing and resetting contracts and business models to deliver on objectives relating to control and transparency, the study said.

"The original trading model left much to be desired," noted Matt Green, Global Media & Digital Marketing Lead at the WFA.

Readers can download a free-to-access Warc report, How food brands are using programmatic, to learn what brands like Chobani, Quaker and Kellogg are doing in this area.

Data sourced from WFA: additional content by Warc staff

Topics