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  • Bob Hoffman


Who doesn't love a good funnel?

Today, we're going to make a nice colorful funnel using the latest data from some of the ad industry's most reliable sources to trace a dollar spent for programmatically-bought display advertising on its exciting journey from your pocket to the bank accounts of middlemen, con men, crooks, and the Bermuda Triangle.

Adtech was created to make the buying and selling of online advertising so much more efficient.

Today, about $600 billion dollars is spent on online advertising. 70%+ of it is bought programmatically. It turns out it has been wonderfully efficient for the lads and lassies in the adtech industry. Not so efficient for losers like you and me. Let's see how it's working...

     1. You start with a dollar to spend   

2. Your agency gets a 7¢ fee   

3. Technology and targeting fees take another 27¢ (DSPs, SSPs, and WTFs)   

4. 15¢ mysteriously disappears into the "unknown delta." No one knows where the "unknown delta" is. My guess? North Korea or Boca Raton.   

5. 30% of the ads you buy won't be viewable   

6. About 20% of the stuff you buy will be fraudulent   

7. Only 9% of the display ads that actually run will be viewed by a real person for even a second. Bastards.   

8. Blogweasel math notwithstanding, it looks like your dollar bought you 3¢ of real display ads viewed by real human people.

As I'm sure you know, no one in the comical online "metrics" business can agree on anything. Consequently, to minimize the torrent of abuse I'm going to get from agency and adtech apologists, I have taken the numbers in the above illustration from the most reliable sources I could find:   

- The first four items come from the ISBA (Incorporated Society of British Advertisers) and PwC's, Programmatic Supply Chain Transparency Study   

- Item 5 comes from Integral Ad Science   

- Item 6 comes from AdAge and Spider Lab's report, "Combating Ad Fraud in the Age of COVID-19"   

- Item 7 comes from Lumen Research

It's important to note that the ISBA study alluded to above only reported on the highest quality tip of the iceberg -- the most premium end of the programmatic marketplace. In other words, the 20% of buys that are presumed to be the most skillful. Even at that premium end, only 12% of the ad dollars were completely transparent and traceable. An astounding 88% of dollars could not be traced from end to end. Imagine what the numbers must be like in the non-premium end.

The "unknown delta" represented about 1/3 of the fees that programmatic buyers pay. This money just evaporates. No one can figure out where it goes. Not even a  famous blogweasel.

I have used 30% as the factor for non-viewable ads. Some research reports it as high as 50%.

I have used 20% as the fraud number at the publisher end of the funnel. Even if fraud at this end is only 10%, the math still comes out at about 3% viewable ads by real people.

How many people actually view a display ad? The IAB defines a "view" as 50% of an ad's pixels seen for one second. Huh? Even by this ridiculous standard only 9% of online ads are "viewed."

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