Shutterstock 708764485

The impact of inventory quality in programmatic buying


Simon Harris 11 jul. 2023

The impact of inventory quality in programmatic buying

In the past weeks we have once again reported significant issues with inventory quality in programmatic buying. 

  • At Cannes the Association of National Advertisers (ANA) announced it had found that on average low quality sites accounted for 21% of impressions delivered and 15% of budget spent and this wasn’t a small study either it analysed $123 million in spend and 35 Billion impressions across some of the worlds largest advertisers. If these estimates hold true more broadly then on average these low quality sites may be grossing as much as $13 billion worldwide. 

  • A week later on the 28th of June the Wall Street Journal reported that Google’s YouTube partner network was serving inventory that was low quality at best, with video ads sometimes stacked on top of each other running across disinformation outlets and pirated content. Indeed it was content so poor that research showed that in some campaigns between 42 to 75% of TrueView in-stream ad spend was allocated to sites and apps which did not meet Google’s standard

Given the issues Google had with inventory in 2017 this very much feels like history repeating itself. But given the negative impact of low quality and non brand safe inventory how does this keep happening?

Why Does This Keep Happening?

It is fair to say in both instances above that buyers could avoid this content by using sophisticated buying techniques, but it is also the case that Adtech shouldn’t be carrying inventory that is at best low quality (and at worst fraudulent) in the first place. 

DPG Media creates high quality inventory that reaches the majority of people in the Netherlands each month, but not all inventory that is available for advertisers to buy is created to the standards we hold ourselves to, in fact some is far from it. But why does AdTech struggle to separate the good from the bad?

  • The first issue is scale, Advertising platforms have inventory quality teams it is very difficult to vet hundreds of thousands of websites and billions of pages for quality. It might make sense to focus on vetting only high quality and established sites…

  • The second is incentives, advertising platforms make money from inventory whether it is reasonable quality or not, as long as it’s brand safe so they carry low quality inventory because they make money from it. If $13 Billion really is how much money is spent on low quality inventory, then advertising exchanges are making $1.17billion per year from the sale of inventory and on the buy side DSPs are making a similar amount from selling it.

How much might this be costing Dutch buyers

So what about the Dutch market? What might the impact be here? Well using some industry estimates we can make some estimation:

  1. From the latest IAB Europe study we know that in the Netherlands the display market is worth around €1.5bn

  2. We know from the same study that across Europe around half of this spend (49.5%) is spent on the open web.

  3. So using these two figures we can estimate that approximately €724m is spent on display on the open web.

  4. We know that around 74% of display is transacted programmatically, with the remainder being spent on direct bookings.

  5. We know that from the latest ANA studies around 15% of programmatic spend reaches low quality Made For Advertising sites.

  6. So with these numbers we can estimate that in the Netherlands alone approximately €80m per annum is spent on low quality sites.

That figure is shocking and shows just how much money is being taken away from legitimate news publishers not only to line the pockets of both those who spin up cheap websites to make a “quick buck” but to a lesser extent AdTech businesses who would stand to gain around €14.2 Million from buying and selling this low quality rubbish.

Ad Manager: A better way

We think there is a better way: DPG Media has recently announced Ad Manager a buying platform that is easy to use but powerful. It’s powered by our first party data and importantly it works exclusively across the trusted web, our high quality sites and apps that are trusted by millions every day to inform, inspire and entertain. 

If you would like to learn more about this platform and the advertisers who are already taking advantage of the powerful combination of first party data and quality inventory please contact us.

Simon Harris
Programmatic trading expert

18 artikelen