Where a programmatic dollar goes

An advertiser approves a dollar of programmatic spend. A reader on a news site sees an ad. Between those two events the dollar passes through a chain of companies, each of which keeps a little. How much arrives at the far end is one of the most studied, and least comfortable, questions in ad tech.

The chain

A simplified version of the route looks like this:

1. Agency or trading desk plans the campaign and operates the buying platform.
2. Demand-side platform (DSP) evaluates each available impression and bids on the advertiser's behalf.
3. Data and verification vendors supply audience segments, brand-safety checks and fraud filtering.
4. Exchange or supply-side platform (SSP) runs the auction for the publisher.
5. Publisher shows the ad and receives what is left.

Each step does something useful. The trouble starts when there are more steps than this, such as resellers passing the same impression between exchanges, and when nobody on the buying side can see how many there were.

What the studies found

Two industry studies are worth knowing by name. In 2020, a study by the UK advertiser body ISBA with PwC traced campaign spend end to end and found that roughly half reached publishers. About 15% could not be attributed to anyone at all, a gap the authors called the "unknown delta".

In 2023, the US Association of National Advertisers published its own programmatic transparency study. It reported that a significant share of open-web spend was going to "made-for-advertising" sites, pages built to attract ad auctions rather than readers, and that the average campaign ran across tens of thousands of websites.

If your campaign ran on forty thousand sites, nobody chose them. That is the point.

The numbers shift from study to study. The shape does not: long supply paths lose money and quality along the way.

The tools that shorten the path

The industry has built a few simple, public mechanisms to make the chain inspectable:

• ads.txt is a text file a publisher puts on its own website listing every company authorised to sell its ad space. If a seller is not on the list, a careful buyer does not bid.
• sellers.json is the mirror image, published by exchanges. It names the entities whose inventory they sell and whether each is the publisher itself or an intermediary.
• The supply chain object travels with each bid request and records every hop the impression has passed through, so a buyer can see the route before paying.

Together these let a buyer prefer direct paths, where the exchange has a relationship with the publisher, over resold ones. That practice is called supply-path optimisation. It is less a technology than a habit of checking.

Five questions for whoever buys your media

1. Can I see a list of every site and app my ads ran on? If the answer is no, or the list is unmanageably long, that tells you something.
2. Do we buy from an inclusion list or rely on a block list? An inclusion list means someone chose where you appear.
3. What are the platform fees, data fees and your fees, separately? A single blended rate hides the split.
4. What share of spend goes through direct supply paths? A buyer who has not looked will not have a figure.
5. How is made-for-advertising inventory handled? Excluding it often makes headline metrics look worse and real outcomes better.

Good answers to these questions do not require an advanced degree, only a buyer who thinks the questions are fair. We think they are. Our programmatic practice is built around them.