1/x <Thread> In-depth log-level study coming out of the UK's ISBA analyzing how funds flow from buyer to seller in ad tech (PDF download). Some highlights: isba.org.uk/media/2422/exe…
2/x DSP fees averaged 8%, which is lower than I expected, But actual fees charged by DSPs varied higher and lower than contracted amounts. 
3/x SSP fees averaged 14%, which is higher than I expected, and exceeded contractual rates by 2% (hmm). This is in addition to Google's Open Bidding which the study found to be another 5% of publisher revenue.
4/x The study shows the percentage of the advertising dollar reaching the publisher, which is the inverse of the so-called "ad tech tax". Interestingly, this percent is broken down by type of ad and by type of buying.
5/x The most controversial finding will likely be a mysterious 15% of spend that could not be accounted for, even after reviewing both buy- and sell-side logs. Let's spend a couple of tweets digging into that...
6/x Discrepancies still exist! Buyers pay bills on DSP numbers, and sellers get paid in SSP numbers and the latter are almost always a couple of percentage points lower. Poof, 3-5% of pub revenue dissapears.
7/x As an aside on discrepancies, this problem got worse with adoption of programmatic. Pre-programmatic, there were arguments between buy- and sell-side ad servers, but the publishers had a much stronger argument to make if they were using DFP, etc.
8/x Another potential problem is currencies. Virtually all programmatic is transacted in $USD, even when both buyer and seller are based in the UK, for example. DSPs and SSPs may update their currency adjustments from different sources at different intervals.
9/x Suppose rates updated 1x/day by a DSP. You’re transacting $1=￡1.3. During the day the actual rate decreases to $1=￡1.25. Your budget spends ￡1,000 that day, and you are billed that amount. But the SSP was converting at ￡1.25. So the publisher receives ￡961.
10/x I suspect that ad quality is another source of this difference, where buy-side is not counting or paying on ads served on objectionable content (cloud ads) or out-of-geo target. I'm not 100% sure on this.
11/x To sum up:
a) Read the report;
b) Not enough of buyer's money is getting to publishers;
c) The reasons aren't necessarily nefarious;
d) Please don't call it an "ad tech tax"
a) Read the report;
b) Not enough of buyer's money is getting to publishers;
c) The reasons aren't necessarily nefarious;
d) Please don't call it an "ad tech tax"
NEW URL TO DOWNLOAD: isba.org.uk/media/2424/exe…
