Supply Chain Efficiences In Action: How GroupM And Index Exchange Saved $2M

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The digital advertising supply chain has been under scrutiny of late.

A report from the Incorporated Society of British Advertisers (ISBA) and  PwC last year found that publishers receive just 51 per cent of all programmatic ad spend – with 15 per cent of spend going to an ‘unknown delta’.

Closer to home, the ACCC has found that fees for ad tech services make up 28 per cent of advertiser expenditure on display advertising, as part of its inquiry into the Australian digital advertising ecosystem.

“There is a real lack of competition, choice and transparency in this industry. These issues add to the cost of advertising for businesses, which will ultimately impact the prices paid by consumers,” said ACCC chair Rod Sims on the findings.

Such studies have prompted calls for improvements to be made not just around transparency, but also when it comes to improving the overall efficiency of the ad tech supply chain.

The Australian Association of National Advertisers AANA and Method Media Intelligence (MMI) recently called for improvements to data portability and data separation mechanisms as a way to improve the supply chain.

Last year, GroupM and Index Exchange launched a partnership with the aim of reducing supply chain costs.

The partnership was launched on the back of Index Exchange’s new Exchange Fee Reduction (XFR) program, which was launched last year as a way for large buyers to drive down the fee received on each transaction, with the savings then passed on to clients. These savings are then immediately reinvested into active campaigns.

Bigger media agencies are therefore able to leverage their buying power and maximise savings.

“Essentially, the more GroupM spends with Index Exchange, the less fees we take. The buyer’s net bid increases, and buyers win more of the impressions they are trying to get,” Index Exchange SVP Buyer Development Evan Krauss told B&T.

The initiative has so far saved over $US1.5 million ($2 million) in supply chain costs for GroupM’s clients – savings that were able to be reinvested into active campaigns.

For GroupM, the partnership has been about showing clients that the ad tech supply chain can be transparent.

“Transparency and ROI are the biggest concerns addressed by clients. The aim of the partnership is to lift the veil on the inner workings of the supply chain, allowing media buyers to find the most efficient, effective and transparent path to programmatic supply,” said GroupM Managing Partner for Global Programmatic Investment Axel Jonuschies.

Brands and data

While most of the savings have come through the introduction of the XFR program, improvements to data access have also allowed GroupM to help its clients better target relevant customers, explained Krauss.

“Via the partnership, an increased number of brands have been able to leverage Index Exchange’s Matched Audiences Identity solution to target their people-based audiences,” he said.

“We can do this by matching brand’s target users via hashed email addresses and match them with publisher data facilitated by graph vendors like LiveRamp.”

This data matching offers the ability for publishers to save in the longterm.

“The difference with this solution is that the match is done on the publisher’s page first before the impression is sold so that it reaches the right audience and increases win rates. These efforts are made to ensure GroupM is prepared for a cookie-less future,” Krauss said.

 

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