Ad tech fees have long been a sore spot in the advertising ecosystem, with ad agencies and brands concerned about how efficiently their money is being spent. There have been estimates that about 15% of an advertiser’s spend is unattributable within automated programmatic advertising.
Also, governments and industry trade groups have launched studies and investigations into ad tech to look for unscrupulous middle-operators in the system that siphon some of the money. Late last year, the Association of National Advertisers announced its latest push to uncover the mysteries of programmatic fees. ANA used a PwC study that estimated that potentially less than 30% of an advertiser’s money goes directly to media that reaches consumers in programmatic advertising, with fees draining much of the budget.
“There are a lot of ‘middleman’ fees going on in the space,” said Mark Pearlstein, chief revenue officer at Permutive, a publisher and ad tech platform. “That is what I think Google is trying to at least provide transparency into.”
To be clear, publishers have perfectly legitimate partnerships with companies like Google and other vendors, which help manage ad inventory, online ad auctions, data and other services. The problems arise when fraud, bots, unsecure websites and other bad actors dip their hands into programmatic advertising pools.
Google’s new tool is limited in that it only is available for publishers that use Google Ad Manager and advertisers buying through its Display and Video 360 demand-side platform. The tool is called “confirming gross revenue,” and it works like this: The publisher and media buyer match their records to make sure the money spent by the buyer is equal to the money accounted for by the publishers. Google said that it was talking with outside demand-side platforms, sell-side platforms, agencies and advertisers to “onboard more partners.”
The revenue confirmation process is not super-granular, however. For instance, “gross revenue” would confirm that a publisher received all the money an advertiser sent its way, but it wouldn’t disclose to the advertiser every ad tech fee associated with its budget. Google and all supply-side ad tech providers take cuts for their services. “It’s a step in the right direction,” said Ashwini Karandikar, executive VP of media, tech and data at 4A’s, the ad industry trade group. “We would love to have more disclosure on the sell side, and hopefully this keeps pushing the sell-side to share more.”