Why Marketers Can’t Track 85% of Their Ad Spend?

Marketers Can’t Track 85% of Their Ad Spend

Digital marketing is an ever-evolving ecosystem. Marketers are always looking to use their intelligence, expertise, and creativity to utilize the tools and opportunities available to them.

Those tools today include an array of sophisticated technology like augmented intelligence, algorithms, machine learning, deep learning, pattern recognition, neural networks, and more. 

Yet, with all these tools at our disposal, did you know that marketers can’t track a significant amount of their ad spend? 

The Unknown Delta of Ad Spend

According to an in-depth study by advertising industry body ISBA, there is an ‘unknown delta’ of advertiser spend.

In this study, they brought together more than 50 companies and 290 unique supply chains. Over a span of 15 months, they reviewed 2.2 billion lines of data. They also observed 267 million total impressions. The findings were interesting.

The report states that even in a disclosed programmatic model, around 1/3rd of supply chain costs remain undisclosed. According to the study, the unknown delta averaged 15% of advertiser spend. 

ISBA programmatic study

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This ranges from 0% to 86%, with the majority from 2% to 23%. The average of 15% is expensive enough. But can you imagine that others are unable to track a whopping 85% of what they’re spending on?

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The report states that this discrepancy could be a combination of many things. This includes:

  • Limitations in data sets.

As the data is from a constrained number of subjects, the data itself may have certain limitations. There may be certain factors that may differ from those studied to the general populace. 

  • Necessitating occasional estimations.

Certain data may not have been in absolutes. Estimations leave space for interpretation and, hence, discrepancies. 

  • DSP or SSP fees that aren’t visible in the study data.

There may be charges applied by either or both the Demand-Side Platform and the Supply Side Platform that remain difficult to separate or clarify. 

  • Post-auction bid shading.

The DSP and the SSP may be bid-shading to save costs. This happens with platforms that use the first-price auction model over the second-price auction model. 

  • Post-auction financing arrangements or other trading deals.

There may be other deals made between those involved in the bidding process. Advertisers may find ways to benefit by doing this. 

  • Foreign exchange translations.

If the auctions involve different sets of currencies, a certain percentage may keep getting cut due to the foreign exchange rate. 

  • Inventory reselling between tech vendors.

Certain charges are applied in purchasing inventory from authorized ad-tech resellers. This may also include charges to intermediary resellers, who usually work with other resellers too.

  • Other unknown factors.

The study also revealed that most marketers used verification tools inconsistently. The most popular tools used were post-bid monitoring and exclusion lists.

An important conclusion of this study is the need for industry collaboration to investigate this unknown delta further. 

It recommends two things, one that cross-industry standardization would facilitate data sharing and drive transparency. The report’s second recommendation is that industry members should collaborate to investigate what these unattributable costs are and create industry-wide consensus on how to reduce them.

The findings of this study highlight a deep-rooted issue in digital marketing – the lack of transparency. Due to this distrust, more people are pushing for third-party cookies to cease collecting customer information. While that’s a good step for ensuring individual privacy protection, it can hurt digital marketers everywhere. That’s one reason why First-Party Data has grown in importance recently.

What’s the solution to track your ad spend?

What can we do? The solution lies in either changing our technology or seeking better services for the existing systems in place.

In terms of tech, many feel that using AI-driven technology may be a solution. Artificial intelligence is, by its nature, open and unbiased. Specific AI-driven tech can understand massive data sets to identify patterns. They can use these to predict outcomes more accurately than ever before, just based on consumer intent. This ability to respond at pace could prove crucial in driving Real Time Bid strategies.

Switching to AI-driven ad tech will feel like a natural progression for many. The digital landscape, in any case, changes very quickly. From simple websites and search engine-based ad spend to creating entire ad networks powered by machine learning – we’ve already come a long way.

Of course, AI does have its pitfalls. Without some level of human involvement, AI still cannot make pop cultural references, be creative, or use any form of individual imagination.

Another solution is to work with a trustworthy and transparent programmatic advertising solution. As transparency and accountability tend to be their USP, these agencies invest in a suitable technology that helps them live up to these expectations. They also stay in-sync with the latest cutting-edge industry trends and techniques.

Suggestions for digital marketing agencies

As the report recommends, high levels of transparency will only come about through digital experts’ collaboration. As far as digital marketing agencies go, they must take steps towards auditing and studying their customers. They may also benefit from investing in an efficient integrated marketing campaign platform. Keeping all your data in one sophisticated and integrated system makes your job easier. It’s also much simpler to keep an eye on all your processes and monitor them. 

Suggestions for brands

It can be overwhelming for brands to individually take such measures, especially if they are busy creating a fantastic product. There are so many other aspects of running a business.

The best practice for a brand would be to employ digital marketing partners to learn how to use a sophisticated and accountable ad-tech, such as an integrated marketing campaign platform.

By encouraging the spirit of collaboration, we should be able to streamline the digital marketing process. We will have a more transparent and harmonious digital ecosystem. This will benefit all 3 members in this delicate environment; marketers, publishers, and consumers. 

We surveyed over 450 industry leaders about the challenges & opportunities they foresee in the CookieLess World.

The report has the insights & recommendations for you to be prepared for the changes to come.