As Ad Budgets Shrink this Winter, Accountable Programmatic Practices Will Build More Resilient Value Chains

UK media owners have been pivotal in bringing attention, awareness, and depth to the turbulent stories that have shaped 2022. But despite high readership, media owners face significant funding challenges. 

As the UK trends towards a recession and individual spending power shrinks, media buyers have some tough choices to make as to where their conservative budgets should be spend in 2023. Underfunding of key news pieces, particularly around the war in Ukraine, makes this more difficult. This underfunding on controversial pieces has been a growing trend since COVID – and is leading to major revenue shortfalls in 2022, with war coverage so constant.

To help reverse these trends, ad tech needs to guarantee that advertising on the open web in the UK remains attractive and profitable. By committing to accountable programmatic practices and building relationships that prioritise cost efficiency, media owners will have the opportunity to secure more funding. 

A more accountable programmatic supply chain is crucial for turbulent times

A key blocker to increasing ad spend on the open web comes from the perception that programmatic isn’t as accountable as it should be. This has even received government attention with the creation of the Online Advertising Programme, which seeks to “tackle the evident lack of transparency and accountability across the supply chain.” While the government shapes the final scope of that programme, the industry must do more to self-regulate.

The good news is that we already have the tools available to address these issues, including a range of technical updates from the IAB Tech Lab and the financial audit toolkit released by the Cross Industry Programmatic Taskforce in March. The IAB UK also recently released their updated Gold Standard 2.1, which places a renewed focus on the technical updates to ensure end-to-end supply chain transparency. Adopting these measures is crucial.

Accountability is a group effort – and a single bad actor can harm the impression of the industry overall. Media owners and buyers need to ensure that they only work with partners that uphold the highest standards. Only then can ad tech achieve true accountability in the supply chain. 

Stronger relationships are crucial for future profitability 

This accountable programmatic transformation highlights why relationships are the most important piece of digital advertising. Programmatic companies can start to build closer relationships with their preferred partners in ways that promise both transparency and higher value for all media owners and buyers in each transaction.

A commitment to cost efficiency is one of the most important strategies for ad tech companies in 2022. With potential budgets slashed, brands and agencies will be looking to run campaigns that achieve breadth and specificity for less. Applying the economies  of scale logic to programmatic is crucial in this. If marketers can buy more media for less, those savings will translate to more profits for media owners.

Ultimately, these strategies will help to strengthen relationships and lead to more resilient value chains where media owners can continue to see digital ad spend regardless of fluctuating market conditions.

Reaffirming ad tech’s initial promise 

There are still huge opportunities to end this year. Digital advertising in the UK will continue to grow (MAGNA’s July estimate was 10%), and globally the UK remains among the most mature digital markets. The UK has always led innovation in digital advertising, and will continue to do so by devising new addressable solutions, creating new ad formats, an engaging consumers across new channels. All of this will help secure continued profitability for media owners now and in the future.

However, existing challenges remain. Media owners have never been more important than in tumultuous years as they cover the stories that shape our world. The original promise of ad tech was that, through the added windfall of digital advertising, those stories could see more funding on the open internet.

In a difficult year like 2022, it’s time to reaffirm that promise. Ad tech has a duty to ensure that, through accountable programmatic, integrity-led stories remain profitable  so that media owners can continue to tell them. 

Sara Vincent

Sara Vincent

Managing director, UK & IE

As the managing director for UK&IE, Sara works with media owners, agencies, and other key partners to accelerate growth in the UK and Ireland through the Index suite of omnichannel programmatic solutions. An industry veteran with close to twenty years' experience, she was named the Wires' 2022 Ad Tech Personality of the Year.

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