The Programmatic Ad Sales Fiasco: A Motoring Journo Rant

Ah, the programmatic ad sales ecosystem. It’s supposed to be the future of advertising, the digital messiah that will save us all from the dark ages of manual ad placements. But in reality, it’s about as efficient as a chocolate teapot.

What is Programmatic Advertising?

Let’s start with the basics. Programmatic advertising is like a giant, automated auction house where ads are bought and sold in real-time. Sounds brilliant, right? Well, it would be if it weren’t for the fact that it’s riddled with inefficiencies and middlemen who take a cut at every turn.

How can I explain programmatic ad-sales better?

Imagine you’re trying to sell a car. You list it on a website, but instead of dealing directly with buyers, you have to go through a series of intermediaries. First, there’s the Demand-Side Platform (DSP), which takes a nice chunk of your potential profit just for listing the car. Then there’s the ad exchange, which takes another slice of the pie for facilitating the transaction. And let’s not forget the Supply-Side Platform (SSP), which also wants its share for connecting you with buyers. By the time the car is sold, you’ve lost a significant portion of your profit to these middlemen.

How does this fit in CTV and FAST Channels?

Now, apply this to the world of Connected TV (CTV), FAST channels, and even newspaper websites. Advertisers are paying top dollar to get their ads in front of viewers, but by the time the money trickles down through the DSPs, ad exchanges, and SSPs, the content owners are left with a fraction of the original amount. It’s like trying to fill a bucket with water, but the bucket has more holes than a Swiss cheese.

Ad-fill rates are not great right?

And then there’s the issue of ad-fill rates. On average, only about one-third of all ad opportunities are sold on these platforms. That means content owners are missing out on two-thirds of potential revenue. It’s like owning a hotel and only being able to rent out a third of the rooms because the booking system is so convoluted that guests give up and go elsewhere.

But wait, it gets worse. The ads that do get sold are often at a lower value because of the multiple commissions deducted along the way. The average Cost Per Mille (CPM) for ads on these platforms is around $10, less than half the original sale rate. It’s like selling a luxury car for the price of a used bicycle because everyone along the chain wants their cut.

What about the Viewers

And let’s not forget the viewers. They expect high-quality, up-to-date content, but what they often get is a decade-old rerun with a side of $30 CPM advertising. It’s like going to a Michelin-star restaurant and being served a microwave meal. The high ad-tech taxes mean that content owners receive as little as one-tenth of the gross revenues, despite bearing most of the costs and risks.

On that bbombshell….

In conclusion, the programmatic ad sales ecosystem is a mess. It’s inefficient, it’s costly, and it leaves content owners and viewers out in the cold. It’s high time we found a better way to do things, one that doesn’t involve so many middlemen and actually delivers value to everyone involved. Until then, we’ll just have to keep muddling through, hoping that someone, somewhere, comes up with a solution that actually works.