Brand safety and suitability, viewability and accurate measurement, and the deprecation of third-party cookies are among marketers’ chief concerns when it comes to programmatic advertising, according to WARC’s latest Future of Programmatic report.

Sixty of the 100 programmatic experts interviewed by market research company NewtonX in July said that brand safety and suitability is their primary concern about programmatic advertising, while 56 said that improving ad verification capabilities is paramount, and 51 identified viewability and accurate measurement as an issue.

Programmatic currently accounts for an estimated 70% of all digital ad investment, but less than one-quarter (21) of advertisers and agencies said they are very satisfied with its contribution to driving positive business results, while 70 said they are somewhat satisfied with its contributions.

WARC said ad fraud and wastage are “rife” across the programmatic ad supply chain, citing a 2023 ANA study which found that just 36 cents of every dollar spent on programmatic reaches consumers, and one-quarter of the $88 billion spent on open web programmatic is “wasted” on low-quality and fraudulent ad impressions.

WARC said that in the months since that damning report, less than half (49%) of advertisers and agencies have established direct contracts or taken the necessary steps to verify or audit the quality of ad impressions. “Collective action is required to urgently address these issues and clean up the ‘murky’ media supply chain,” it concluded.

Google and cookies

The report also arrives in the wake of Google’s bombshell announcement that it would abandon plans to phase out third-party cookies in its Chrome browser, instead opting to allow consumers to make what it called an “informed choice.” 

Industry experts worry that the tech giant’s decision creates uncertainty and slows momentum for a privacy-first approach to digital advertising. WARC, meanwhile, concluded that the industry “does not seem prepared” for a world without third party cookies, with only 25% of respondents saying marketers and agencies are making adequate progress. 

WARC said that if Google’s mechanism operates like Apple’s AppTrackingTransparency, marketers can expect “large swathes” of consumers to switch off cookies on their Chrome browser. “Combined with tightening privacy regulations, and a declining pool of addressable inventory, it seems that third-party cookies will play a diminished role in digital advertising in the future,” WARC concluded.

First-party data

The WARC survey also found advertisers are “doubling down” on efforts to collect first-party data, with more than three-quarters of respondents saying they are implementing first-party data strategies, and more than half (57) saying that it is the most promising solution.

The environment

WARC also said that advertisers need to take responsibility for the carbon emissions produced by what it characterized as a “notoriously complex” programmatic supply chain. A 2023 report from Scope3 found that programmatic advertising generates 215,000 metric tons of carbon emissions each month across five leading economies, but nearly two-thirds (59) of advertisers and agencies surveyed for the WARC report said that reducing the emissions generated by programmatic advertising is not a priority.

Only 31 said they have adopted a framework or set of methodologies to measure the carbon emissions from their digital advertising, while another 34 said they have taken no action at all to reduce their carbon impact.

More than half of respondents suggested that the absence of industry-wide standards is a “clear barrier” to emissions reduction, said WARC. Nearly half (48) said that there is a lack of knowledge and/or skills around reducing the carbon footprint of their advertising activities.

Mark Andrews, a senior consultant at ID Comms, told WARC that some advertisers are relying on their media agency to forecast carbon emissions, which is educating planners and buyers and helps media teams think about carbon emissions and consider how decisions made at the planning stage can lower those emissions.

Walled Gardens

While the open web is where consumers spend most of their time online, WARC said that investment in so-called walled gardens is growing. It said that just five platforms—Alphabet, Amazon, Meta, Alibaba  and Bytedance—will take in more than half of all global ad spend this year, with 76  saying they are spending 40% or less of their budget on open web advertising.

It said that advertisers and agencies are opting to spend more on programmatic direct deals at the expense of real-time bidding. More than half (56) said they are purchasing display using programmatic, and retail media also figures prominently on the list of channels transacted programmatically. It said that social and gaming are expected to receive the largest increases in programmatic investment.

This story first appeared on Campaign Canada.

That’s one of the findings of a joint study between Omnicom Media Group agency PHD Worldwide and WARC, which surveyed 700 marketing and agency executives (in 10 different countries, including the U.S., U.K., Australia, China, Brazil, and others between May and June of this year) to better understand their plans for AI’s incorporation into their work between now and the end of the decade.