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Programmatic Platforms Take 10% of Ad Spend

Programmatic Platforms Take 10% of Ad Spend

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The GroupM study sheds some light on how much ad spend ends up in the hands of programmatic platforms, including on the demand-side and supply-side.

Demand-side platforms (DSPs) and supply-side platforms (SSPs) take around 10% of ad spend passing through them, according to GroupM’s audit of the programmatic ecosystem.

The media buying firm also found that programmatic advertising fee rates varied by region. While combined worldwide rates sat at around 20%, matched by the US, figures in APAC were as high as 22%, while Europe fell below the global average at 19%.

Based on the findings, GroupM surmises that tech vendors collectively receive around one-fifth of the overall spend advertisers send to publishers whenever they purchase their inventory.

While 20% combined might not sound a huge amount, it’s the transparency around those fees that is cause for concern among advertisers and publishers. According to eMarketer, however, just five years ago these figures could have more likely been anywhere from 40%-65%.

Fees have taken an overall decline as publishers and advertisers alike are trimming down the number of platforms they use, adding pressure on vendors to reduce fees. A recent study from QueryClick found that 46% of advertisers planned to reduce their programmatic ad spend.

Meanwhile, lower SSP and DSP platform fees are added to by additional fees from the ad tech firms, Data Management Platforms and tech vendors involved - or “tech tax” - which can account for up to 55% of total spend on programmatic.

Just last week the World Federation of Advertisers (WFA) launched its Global Media Charter - a framework that ad tech firms and tech vendors would need to comply to establish better relationships when buying and securing ad revenue appropriately.

Stating that the “largest chunk of the world’s advertising budget” is now invested in ad platforms, the group’s chief executive, Stephen Loerke, said, “advertisers have a right to demand that the money they invest can be clearly tracked and understood.”

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Mustafa Mirreh

Mustafa Mirreh

In addition to managing editorial on PerformanceIN, Mustafa reports on the latest day-to-day news updates from the world of digital marketing, while also doing social media promotion, live reporting of events, article features and interviewing key industry players and stakeholders.

Based in Bristol, Mustafa graduate with a marketing degree before delving into the world of music journalism through self-starting an online blog and collaborating with other publications. Now he has joined the PI team and has set his sights on succeeding in digital marketing.

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