60% Advertisers Focus On Improving Brand Safety: Report

WARC, in partnership with NewtonX, a B2B market research firm has unveiled its comprehensive report, 'The Future of Programmatic 2024', delving into trends and challenges expected to shape the programmatic advertising industry over the next year.

The report, based on a survey of 100 programmatic experts conducted in July 2024 outlines pressing issues that the industry must address to optimise performance and effectiveness.

Paul Stringer, Managing Editor Research and Insights, WARC, says: “Our Future of Programmatic report arrives in the wake of the announcement from Google that third-party cookies will no longer be fully phased out from the advertising ecosystem. While it represents a reversal of sorts, this should not encourage complacency. The industry still needs to evolve to meet the demands of a privacy-first ecosystem.       

“Declining addressability, brand safety and ad fraud continue to concern marketers, and addressing these concerns becomes even more important as increasing volumes of spend are transacted programmatically each year.” 

Here are the key findings:

Brand Safety Dominates Concerns
Brand safety remains a top priority for advertisers and agencies with over 60 per cent of survey respondents citing it as their primary concern in programmatic advertising. The report highlights that despite programmatic channels accounting for over 70 per cent of digital ad spend, there is widespread dissatisfaction regarding the quality of ad placements. Advertisers are increasingly frustrated by low-quality ads that compromise brand safety.

To address these concerns, 56 per cent of respondents have identified enhanced advertising verification capabilities as a crucial area of focus. The need for better safeguards to protect brands and ensure high-quality ad placements is paramount.

Hannah Rook, Head of Intelligence and Insights, MediaBrands Magna Group says, “Advertisers and agencies need to take a more proactive and comprehensive approach to brand safety, expanding their placement criteria to make better decisions and ensure their ads appear in appropriate and relevant environments.”

Adapting to Cookie-diminished Environment
The industry's adaptation to a post-cookie world remains a challenge. Despite Google's planned reduction in cookie use, many advertisers are struggling to adjust. Only 25 per cent of survey participants believe that progress is adequate in adapting to this shift. To counteract the effects of signal loss on targeting and measurement, more than 75 per cent of respondents are investing in first-party data strategies, with 57 per cent considering it the most promising solution for future success.

Wayne Blodwell, Co-Founder and CEO Impact Media says, “Google’s decision to keep cookies has not changed the direction of travel for the industry. Advertisers should continue leaning into smart, cookie-free techniques like attention and econometrics to prepare for a privacy-first world.”

Transparency and Fraud Issues Persist
Transparency in the programmatic supply chain continues to be a major issue with ad fraud and wastage remaining prevalent. The ANA's study reveals that only 36 cents of every dollar spent on programmatic advertising reaches consumers while a significant portion is lost to low-quality and fraudulent impressions. Despite this, less than half of advertisers (49 per cent) have established direct contracts or taken necessary measures to audit ad quality. There is a clear call for collective action to address these transparency issues and clean up the media supply chain.

Emissions Reduction Lags Behind
Sustainability is another area where the industry is lagging. Programmatic advertising contributes over 215,000 metric tons of carbon emissions monthly across major economies. However, nearly 60 per cent of surveyed agencies and advertisers do not prioritise reducing these emissions. Only 31 per cent have adopted frameworks to measure carbon emissions and 34 per cent have taken no action to mitigate their carbon footprint. The lack of industry-wide standards and knowledge gaps are cited as barriers to effective emissions reduction.

Mark Andrews, Senior Consultant, ID Comms says, “Some advertisers are using their media agencies to forecast carbon emissions on their media plans. This is educating planners and buyers and helps media teams think about carbon emissions as well as considering how practical decisions at the planning stage could lower emissions, without negatively impacting the effectiveness of media planning/buying.”

Shift from Open Web to Walled Gardens
Investment patterns are shifting with a noticeable decrease in open web spending as advertisers focus more on walled gardens. Forecasts indicate that five major platforms are expected to capture over half of global advertising spend this year. Three-quarters of respondents are allocating 40 per cent or less of their budgets to open web advertising, favouring programmatic direct deals and traditional real-time bidding. Social media and gaming are anticipated to see the largest increases in programmatic investment.