Perspective on the digital supply chain debate

This post is by Stephen Wright, who has recently returned to TrinityP3 to head media consulting after 2 years at a specialist programmatic agency.

Last month, ISBA in the UK released the findings of their long awaited Programmatic Supply Chain Transparency study.

Eighteen months in the making it was the first wide scale study into the much maligned digital supply chain.

The trade press globally have been welcoming of the findings but here in Australia there are those that seemed determined to focus on nothing but the negatives.

Headlines of ‘88% of Ads can’t be tracked’ and ‘50% of ad spend disappears’ do the research and findings injustice.

In this blog we unpack the findings to see what has been achieved, determine how it is of value and propose ways in which the industry can move forward positively building on the study.


3 years ago when transparency concerns first emerged, studies estimated that no more than 40% of funds were finding there way back to the publisher.

In the UK the Financial Times purchased activity on it’s site to discover they receive only 30% back through the digital supply chain.

The ISBA PWC study reported an average of 51% returned to the publisher.

An improvement of at least 11% and potentially as much as 21%.

This in itself is encouraging progress.

The pressure brought to bear by advertisers has reaped rewards.

But what of the 49% remains, how much of this is questionable and how much a reasonable cost to fund the necessary steps of the supply chain.

On the agency demand side there is 7% attributed to Agency fee, 8% to the DSP fee, 10% to Technology fees. 

An overall total of 25%.

On the publisher supply side 8% for SSP fees and 1% for Tech fees.

An overall total of 9%.

This accounts for 34% of the 49% with the average balance of 15% being listed as ‘unknown delta’.

Key unanswered question

What was disappointing was, given a wealth of technical experts boasting extensive experience across all stages of the supply chain, that no attempt was made to suggest whether this 34% of combined fees could be considered as reasonable.

It’s an incredibly important question that seems to have been lost in the debate.

The industry desperately needs to establish some sort of benchmark that reflects acceptable behaviour from all parties in the supply chain that rewards them appropriately for the services provided.

There will of course be a range, but what is the average mean benchmark which we can establish as a target and goal.

Failure to nail this down allows journalists and critics to run with headlines that imply 50% of spend is fraudulently disappearing.

If 34% is too high what should it be, where are fees too high and what should they be?

There will always be a range but there has to be an established acceptable average benchmark to allow more informed discussion and debate.

The 15% of unknown

Beyond the 34% there was 15% that could not be attributed to any known source within the supply chain.

That’s a hefty proportion for a study that had full cooperation from all parties along the way. 

A long list of possibilities was included in the report, the only one which had any legitimacy was foreign exchange translations, all the others were nothing more than euphemisms for ‘someone taking an extra slice of the pie on the quiet’.

What was equally concerning was that this ‘unknown delta’ was as high as 85% in one case and was in many cases up around 20%.

Given the study included only large mainstream advertisers placing business through larger media agency groups and found they could only track 12% of the total bookings submitted, it raises questions  around what could be happening at the fringes of the industry with less educated advertisers operating through smaller agencies.

It suggests that this snapshot study is likely to represent a best case scenario.

A further area for thought concerns the 9% of fees on the publisher supply side.

These are fees paid by the publishers to allow them to sell their inventory.

Study numbers always suggest that this component isn’t returned to the publisher and is lost in the supply chain but it’s a component of the fee over which they have control and a choice willingly paid to generate advertiser revenue.

Difficult to classify it as revenue lost in the supply chain.

It’s effectively received and reinvested by the publisher.

So what does this mean for marketers?

1. Work cooperatively with your marketers

  • PWC took 2 years with the cooperation of their agencies and ad tech providers to achieve visibility across 12% of activity.
  • You may have auditing rights within your contract but any attempt to exercise them in this area would be expensive and largely futile.
  • Work cooperatively with your agency to discuss the elements of the supply chain within their control.

2. Media Agencies shouldn’t disproportionately shoulder the blame

  • Media Agencies took all the heat 3 years ago when matters came to light. This had foundation and was justified in part.
  • Since then Media Holding Companies have divested their share of tech supplier middlemen and moved to more open contractual terms. 
  • There is a 15% of unknown fee that remains on the loose but this shouldn’t be seen as an undisclosed agency commission.

3. For larger advertisers it’s not as bad as the headlines suggest

  • Headlines that suggest 88% of transactions are still murky and 50% of funds are rorted are misleading.
  • The study suggests 15% of an advertisers funds remain unaccounted for and perhaps another 5% need a greater level of substantiation and validation.

4. If you are a smaller digital advertiser this represents a best case scenario

  • The Advertisers in the study were significant spenders with in house expertise and knowledge.
  • If you are less digital savvy with more modest budgets, relying on external advice, your pricing across the supply chain may be greater than that in the study.
  • For you this is potentially a best case scenario.

5. Focus on outputs and results for value

  • There remain unknowns. While this process works itself through you should focus on the outputs provided by the Agency.
  • Have you established clear targets and goals, how well are they performing, how frequently do they optimise schedules, what is working and why?


There is a lot of investigative work still to be done but the cooperation of Agency groups and Ad Tech partners is an important step in the right direction.

It’s easy to be a critic but better for the industry to applaud the progress made by ISBA and PWC and work together to move forward from here.

For TrinityP3 the most critical 2 matters are – to establish an appropriate and fair industry benchmark for supply chain cost and to champion new technologies that deliver transparency of the 15% unknown.

TrinityP3 has support packages to assist advertisers and can review the terms under which digital services are priced and provided through their current agency partner. Find out about our comprehensive media assessment service here