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The creation of the Cross Industry Programmatic Taskforce earlier this year is a very encouraging and positive step forward.
It is great to see parties involved in the programmatic supply chain coming together to acknowledge there has been a major issue around transparency in our industry, which has long caused wastage in advertisers’ media spend.
We’re also glad to see chartered accountancies like ourselves are being used to support the taskforce. It’s great to see the parties involved recognising the value of using accredited firms to review confidential data.
There now seems to be serious intent to solve an issue that has been growing for several years and is increasingly important as programmatic trading continues to grow.
But there are challenges ahead.
In particular: defining roles and responsibilities, securing agreement from all parties, and the storage of appropriate data.
Who leads the charge?
We are confident that the processes outlined in the Financial Audit Toolkit are comprehensive. If utilised well, they’ll give new visibility into what’s been termed the ‘unknown delta’, or the amount of spend within the chain that is essentially unaccounted for.
It should go a long way in identifying where wastage is happening and allow advertisers to take measures that either reduce or remove it.
However, while there is clearly intent on behalf of all parties to solve this issue, the financial audit toolkit is only a guiding set of principles. It is not a set of contractual documents committing all parties to transparency obligations.
The true test of the effectiveness of these principles will only be determined when the parties are required to sign unaltered contractual terms that provide this transparency.
Importantly, who will be given responsibility for marshalling this process and ensuring acceptance sign-off from the supply chain entities?
Will this be the advertiser? Or will this be an obligation they expect the media agency to perform as part of their scope of services?
There needs to be clear communication of responsibility between the parties from the outset.
Getting buy-in from all parties
When exactly to agree on these roles and responsibilities is a tricky question.
Many Media Service Agreements (MSAs) still have years to run. So, is it the intent to addend these principles to existing MSAs? Or would advertisers need to wait until current agency and ad tech contracts expire?
Either way, this poses the follow-up question of buy-in.
Will ad tech intermediaries sign up to the transparency principles as standard practice? Or will it be the responsibility of the individual advertisers or publishers to ensure that partners sign up for the campaigns that are relevant to them?
There are so many intermediaries that this could be a very long and complicated process.
Not to mention the elephant in the room – if someone disagrees with signing up.
What will happen if an ad tech intermediary refuses to agree? Are they locked out of the programmatic ecosystem for that client or publisher?
We imagine that chains of intermediaries that can demonstrate they are all aligned with the objectives of the taskforce will find value, especially from an agency perspective.
Part of what agencies are being paid to do is ensure effectiveness. So, if they can show advertisers that they are getting transparency down the supply chain given the partners they use, they surely become a more attractive partner to advertisers.
Hopefully, this process will create a culture of shared responsibility, with all relevant parties comfortable in the knowledge that external auditing will subsequently be a straightforward process.
Key point – finding the right data to audit
Perhaps the most important element for the guidelines to be a success is data.
Programmatic involves millions of tiny adjustments and transactions, which leads to two levels of data – aggregated and log level. Log level is much more detailed and gives auditors the ability to really drill down into costs, placement, and timings. It’s vital in order to see how much an ad placement cost and which parties that ad went through to be placed.
All the transparency principles enshrined in the toolkit are predicated on the basis that programmatic log files will be available for audit review. However, unless agreed otherwise, most advertisers’ MSAs programmatic log files are often destroyed by DSPs or Exchanges within a matter of days.
If the data is not available to test, any transparency principles are irrelevant, as the data simply won’t be there to be audited.
As such, even if the transparency principles take some time to filter through to an advertiser MSA, it is vital that advertisers review their current MSAs now to ensure that their data retention policies with their agency and ad tech partners require log files to be retained.
Otherwise, quite simply no retrospective financial compliance review will be possible.
Encouraging conversations
We believe that the efforts made by the taskforce are a massive step forward in identifying and hopefully eliminating wastage within media spend.
Now, we encourage the industry to consider the questions we have posed and discuss them with the parties in the supply chain. If together we unpack the guidelines properly and ensure that they are managed well, with the relevant data available to audit, we can streamline our industry and build stronger relationships.
Elliot Sherrington
Senior Partner, Media Marketing Compliance
Media Marketing Compliance is an independent marketing compliance consultancy launched in 2021. Led by Former FirmDecisions Founder and CEO, Stephen Broderick and several former members of the FirmDecisions senior management team, the newly formed firm’s experience is not only in media compliance but also encompasses all marketing categories and their respective supply chains. Media Marketing Compliance has offices in key locations in six continents and the team has conducted audits in over 110+ countries.
