Reed Smith formed part of the core team drafting the seminal ANA Programmatic Media Supply Chain study.  Our RS Ad Bites breaks down each of the findings and delivers a key consideration when thinking about a marketer’s contractual relationship with its agency or vendor partner in respect of programmatic buying to protect your bottom line.  

Below is the fifth in our series. The full report can be found at ana.net.

Information Asymmetry

#5 - Marketers should aim to enhance the quality of information both within their organization and across the supply chain to reduce the drawbacks of information asymmetry. The study revealed that “information asymmetry”—an imbalance in the nature and quality of information possessed by different parties in a transaction—impacts marketers as it hinders transparency and leads to convoluted and ineffective processes. Marketers’ unfamiliarity with programmatic buying processes often results in heavy reliance on agencies, putting them at a disadvantage and potentially resulting in overpayment for the inventory received. For instance, without understanding the quality of goods, marketers struggle to accurately price them with precision or certainty. 

When surveyed about their knowledge of inventory quality in auctions, only 32% of advertisers considered themselves mostly/very knowledgeable. Additionally, 54% of marketers expressed neutrality or discomfort regarding transparency levels in their programmatic media investments. Factors contributing to this asymmetry include marketers’ lack of tracking activity on Made for Advertising websites in their programmatic advertising campaigns, or, in some cases, complete lack of awareness of such websites.

The recommended playbook is:

1. Appoint a Chief Media Officer to take responsibility for the internal media management and governance processes that deliver integration, transparency, accountability and performance. 
2. Bridge the information gap – find out about your supply chain and the costs for each and don’t be afraid to ask lots of basic questions including “How many websites should we be on?  What is wasteful inventory and how do we avoid it?  How many resellers will be in the value chain and what should our policy be around supply chain optimization?  What information will I get about the underlying price of the media?  Who controls the DSP configuration on campaigns and what is the remedy if configured incorrectly?  Am I paying on bids or placements?  How can we hold parties responsible for buying or verifying our campaign buys when they get it wrong? 
3. Be an active steward of your campaigns; monitor and audit campaign impressions to make sure you know where your spend has gone. Do not outsource the entire responsibility for activation and monitoring to third parties that generate margin on campaign spend. 
4. Establish contractual protocols for accessing information by negotiating the right to be informed about the terms of the deals your agency is making, and in what capacity. Alternatively, work with qualified legal counsel to bespoke the ANA Master Media Buying Services Agreement Template to ensure transparency in your agency agreements. 
5. Drive media and placement transparency through log-level data analysis and other analysis of placement and costs.