NEW YORK: Brands using programmatic advertising pay a "technology tax" effectively accounting for more than 40% of their spend, according to a study from the Association of National Advertisers (ANA) and Association of Canadian Advertisers (ACA).

The Programmatic: Seeing Through the Financial Fog report, produced by the two trade bodies in conjunction with Ebiquity and AD/FIN, included an assessment of 6.6bn impressions drawn from 445 campaigns, and spanning the entire programmatic supply chain.

"Across the full supply chain, the overall ratio of 'working' to 'non-working' spend was found to be 58/42% on average, when the costs of both demand-side and supply-side fees and services were included," the study said. (For more detail, read WARC's report: How marketers can undercut the "tech tax" on programmatic spending.)

The 58% total, it continued, represents the "mid-point" when determining the share of each dollar in expenditure that ultimately goes to media inventory and audience exposure, while 42% is consumed by transaction and data fees.

Depending on the precise campaign in question, however, the proportion of spend claimed by the publisher varied between 54% and 61%.

Research released in 2014 by the World Federation of Advertisers (WFA), another trade group, pegged the programmatic "tech tax" at roughly 60% – and the ANA/ACA suggested their study may have replicated this result had it assessed a wider dataset.

"We believe a potential difference between the [Financial Fog] study's findings and those of the WFA," the ANA/ACA said, "is explained by the fact that the current study contains only disclosed programmatic buys, and had limited inclusion of agency trading desk fees."

Drilling down into this theme, the ANA/ACA asserted that their totals solely covered disclosed transactions (where detailed costings are available to brands), meaning they excluded extra costs associated with non-disclosed transactions.

Similarly, less than 5% of data in the Programmatic: Seeing Through the Financial Fog investigation were from agency trading desks, and so did not account for related fees. According to the WFA, these trading desks take 15% of spend.

"If this fee were included, the resulting calculation [of spend claimed by publishers] would be between 39 and 46%, in line with their estimate," the ANA/ACA said.

Beyond this, the Financial Fog report explained, "The calculations in this study do not include any potential effects of ad fraud, non-human traffic, viewability, or brand safety, all of which can have a substantial impact on the final effective cost (and performance) to advertisers.

"In addition, the study did not attempt to uncover 'arbitrage' by any party (an entity buying at one rate and selling at a higher one) nor attempt to explore non-disclosed programmatic transactions."

Data sourced from Association of National Advertisers; additional content by WARC staff