Breaking Down The Adalytics MFA Report

Any report that names dozens of major brand advertisers (and their holding company agencies) as wasting significant amounts of money is going to get a lot of attention. At a minimum, it sent a lot of people into a deck-creating frenzy last week to justify their buying practices to date!

Is the report as bad as it seems? Yes and no. Is there "room for gray?" Absolutely. The report says so in the conclusion! Here we'll break down what's important, what needs to be addressed, and what is more alarm than fire.

MFAs Are Terrible!

The entirety of this report is centered on the idea that MFAs - sites that are Made For Advertising - are bad. They're bad for advertisers, bad for ad tech, and bad for users. There is a lot of truth to this. Most MFAs offer a terrible user experience by showing way too much ad content and using too much device memory (not good for the planet.) When there is too much ad content, the messaging a brand wanted to deliver to the consumer gets lost and likely ignored. However, MFAs have been lumped by some into the same ad waste category as fraud, and that is a mistake. Fraud exists when there is zero chance the ad is seen by a human. There is plenty of fraud on MFA sites, but there are humans, too. As long as there are humans, this also means there is no clear line at which point a site becomes MFA. Eight ads? 10? 50? As the report calls out, many different groups have put forth their definition of MFAs but I'm not sure a comprehensive one exists. Therefore it's important to take this entire report from Adalytics seriously and directionally.

Don't Trust. Just Verify.

Has the old saying, "Trust, but verify," ever been appropriate for media buying? For 50 years we used a statistically invalid panel of users to buy TV, but that doesn't mean we should have trusted it. Neither Google nor Facebook provide any data - even to an independent auditor - that shows they run honest auctions. In fact, testimony by Google revealed they don't!

Programmatic is an easy target because - especially in the late 00s and early 10s - there were dozens of vendors out there promising the impossible. Many brands and buyers listened, got burned, and found out way too late. However, open web programmatic is the only place a smart buyer can audit their supply chain and the integrity of the players along the way!

Good advice for brands and buyers hasn't changed since it was first given to me in the 90s. Don't take what companies tell you as truth. Take it as a starting point for investigation and verify for yourself. This means the accountability is on the buyer to do the hard work!

The Incentives Are Terrible For Nearly Everyone

PwC was retained by the ANA to do the audit for its programmatic media supply chain study. Yet, PwC was named/shown in this study practicing poor media buying and hygiene! How does the auditor themselves not get this right? The answer is simple. It's not them, it's their agency. The agency who likely went through rounds of negotiation and cost concessions to win the business. Imagine if this is how we bought services from our doctors, CPAs, and attorneys. We wouldn't get great quality, even if the providers were capable of it!

All of the major holding advertising agency holding companies are public, too. Having agreed to reduced compensation to win the business does not alleviate the holding companies' need to deliver for Wall St and this only exacerbates the problem.

There are at least two major factors preventing most ad tech companies from doing what's right. First, they've either taken significant VC funding or are public. Getting rid of 30%+ of their inventory would most likely create results unacceptable to their investors. Second, their competitors will shout them down to maintain the status quo. It would take several ad tech companies doing what's right together, and that coordination is unlikely.

Back to brands. It's (unfortunately) politically safer to not know and sweep this problem under the rug. Look at the brands quoted in the report. They essentially say, "we've solved this!" Clearly they haven't. How often does the whistleblower get promoted and praised? Not often!

Shock vs. Reality

In a report like this it's really important to separate the shock from the reality. The "gasp" aspect of naming brands, agencies, and ad tech companies and plastering their logos all over the report is shocking. We tend to think of these as "hit pieces" or "shots across the bow." Having met and spoken to Krzys, I don't think he means it this way nor is it his objective. He genuinely wants a better industry.

The reality is, the industry can do better but we first have to acknowledge the problem. Buying without stringent controls will result in significant waste and fraud!

I believe agencies are in the best position to solve this problem.

Having (very coincidentally and fortuitously) released a guide and whitepaper on eliminating fraud and waste in programmatic on the same day as the Adalytics report came out, I've made sure all Goodway Group agencies are relentless about eliminating waste and fraud and pushing through client or industry doubt. To help brands and even other agencies, we outline a programmatic buying maturity model to improve efficacy (see report.)

Now, What To Do?

Once we get past the shock, there are some really valuable takeaways here you can act on!

1. First and foremost - you must have stringent media buying controls in place in all of your media! Not just digital or programmatic! Media buying is a profession and requires expertise.
2. Part of this is buyers getting their supply path optimization (SPO) in order! Why are major advertisers working with 15 (or 30, or 50) SSPs??? Great programmatic buying can be achieved buying from 5-10 SSPs including those that specialize in video, mobile, native, DOOH, etc.
3. Brands and agencies are NOT "covered" by working with the average verification/monitoring vendor. Clearly! See the whitepaper we mentioned above. Run Adalytics or FouAnalytics alongside your current vendor to see the difference.
4. Stop thinking Private Marketplace (PMP) deals are a solution to quality. Garbage in is still garbage out.
5. I don't know how TTD escaped appearing in this. They use HUMAN, but HUMAN appeared. Jud Spencer is brilliant and does probably the best job of anyone at any DSP in controlling supply, but hard to think nothing at all appeared?

Broader Implications For The Industry

1. No industry body will fix this. That's not a knock on them, but a call to you to take accountability for making the changes that are needed!
2. MFAs shouldn't be the focus. Overall ad quality and hygiene need to be the priority. Otherwise we're playing whack-a-mole and a different problem will simply appear elsewhere!
3. Retail Media Networks can gain a MASSIVE advantage over competing RMNs by cleaning up their supply and proving it.
4. SSPs are going to drive themselves to extinction if they don't clean up their supply. I could write a whole piece on this!
5. If, after reading this, you're still "all in on Google," then nothing will change your mind. The DOJ trial that begins in September will have a permanent impact on Google's structure and holdings. Once some aspects are decoupled, it will be fascinating to see to what degree this gig continues.

The whitepaper we just released (linked early in the article) provides much of the "how to" for solving or avoiding this problem in the first place. It is up to us - leaders in the marketing industry - to stop the shock --> CYA --> change-the-subject pattern and eliminate this problem head on. The great news is, it can be done.