There's no denying it, the process of purchasing and executing digital advertising campaigns has become unnecessarily complicated over the past decade.
While the complex digital advertising system may benefit adtech intermediaries who facilitate the flow of ad dollars, it has a detrimental impact on advertisers and publishers.
Specifically, the lack of transparency around digital media technical costs enables hidden fees to chip away at campaign budgets.
As a media expert who has audited campaigns worldwide, I have seen firsthand how opaque costs can spiral out of control.
It is now my mission to empower advertisers to take control of their partnerships with media agencies. Understanding technical costs is the critical first step.
What Are Digital Media Technical Costs?
In simple terms, any fees charged by various middlemen involved in the transaction between advertiser and publisher fall under this umbrella term. As the number of intermediaries has proliferated, so too have the line items labelled as “technical costs.” Some of the most common include:
- Ad Serving: Ad serving charges are the fees paid to use a platform that delivers and tracks your digital ads across websites and platforms, ensuring they reach the right audience at the right time.
- Demand-Side-Platform (DSP): DSP fees cover the use of technology that automates the buying of ad placements in real-time, allowing advertisers to efficiently purchase the best digital ad inventory for their campaigns.
- Viewability: Viewability costs are associated with measuring whether your ads are actually seen by users, ensuring that you're paying for ads that have a real chance of impacting your target audience.
- Brand Safety: Brand safety expenses relate to the use of tools and services that protect your brand by ensuring your ads do not appear alongside inappropriate or harmful content.
- Ad Fraud Detection: Ad fraud detection costs cover the tools and services that identify and prevent fraudulent activities, such as bots viewing or clicking on ads, ensuring that your advertising budget is spent on genuine interactions.
Why Should This Matter To You?
Individually, each cost may seem reasonable. But in aggregate, they can account for over 50% of total digital ad spend.
Industry studies, including those by the Association of National Advertisers (2015), the World Federation of Advertisers (2016), and the Incorporated Society of British Advertisers (2020), reveal that less than 50 cents of every dollar spent in digital channels reaches publishers for ad display.
The rest is consumed by middlemen in the programmatic supply chain, with an alarming average of 15% of the budget "going missing" due to the complexity and opacity of the process.
Advertisers are effectively paying a 50% tax on digital ads, with additional costs for fraud detection, brand safety, and viewability services, especially when ads are placed in less reputable online spaces.
The Damage From Hidden Fees
This enormous adtech tax directly harms advertisers and publishers alike.
Advertisers pay more to reach less people, while publishers earn less revenue for their content. But perhaps most critically, opaque technical costs engender distrust.
How can advertisers have confidence they are getting what they paid for? How can publishers trust they are getting fair value? The entire digital media ecosystem suffers from this corrosive lack of transparency.
Over the years, I have seen no shortage of concerning anecdotes from my audit experience. Many clients had competitive rates for technical costs written into their agency contracts, only to discover via regular performance tracking that they were paying multiples more in reality. Hidden margins and undisclosed principal transactions abound.
For example, one media agency was deliberately obfuscating costs by reporting video campaigns under the cost line item for display buys. A thorough audit unearthed not only massively inflated costs, but numerous other red flags.
Taking Back Control As Advertisers
So what can advertisers do in the face of this daunting challenge?
The critical first step is education. Advertisers owe it to themselves to invest time in understanding the technical costs associated with various media tactics and partners.
While the landscape shifts constantly, guides from reputable industry groups can provide rough benchmarks.
Regularly tracking costs during campaign flights is also essential, as is comparing metrics across markets and partners.
Resources exist to help advertisers separate working media from technical costs. Leveraging them distinguishes informed buyers from unaware victims.
The Path Forward
Ultimately, transparency is in the best interest of all industry players.
Advertisers must demand more accountability from agency partners, requiring detailed cost breakdowns and true-ups against contracts.
Publishers should collaborate on tools and standards to bring hidden costs to light.
After years of opacity obfuscating the flow of ad dollars, the time has come for change.
Shining a light on digital media technical costs will strengthen relationships, improve ROI, and restore trust across the advertising ecosystem.
If you are an advertiser wanting to take control of your technical costs, we can help shine a light. We can verify contractual compliance, benchmark your technical costs against industry standards, quantify potential savings, and provide the insight you need to optimise your digital media investments. Contact us today or schedule a free consultation.
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About the Author
Philippe Dominois is co-founder and CEO of Abintus Consulting, and Head Coach at the Abintus Academy. He has over 25 years of international media experience, having worked on the media agency side, client side, and media auditing side throughout his career. Philippe has authored hundreds of articles over the years that focus on media management best practices.
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