The news: Despite programmatic’s growth, wasted ad spend has surged 34% in two years, hitting $26.8 billion, according to a new Association of National Advertisers (ANA) study.

While the ANA did track improvements in some parts of the programmatic marketplace—namely, declines in programmatic waste on made-for-advertising (MFA) sites—it noted “billions in unrealized value and [a] dip in efficiency” in programmatic ad spending overall.

The programmatic problem: While big players like Netflix and Spotify are going all-in on programmatic, key problems linger. Wasted spend leads the pack: Less than half of every dollar spent on programmatic ads in the US effectively reaches consumers, per the ANA.

But beyond wasted spending, programmatic presents notable problems:

• Brand safety concerns remain. Programmatic automates ad placement, increasing the risk of ads appearing alongside risky content that damages brand reputation. Programmatic ad buying lacks the quality control necessary to keep up with rapid innovation and demand for ad space.
• Fraud and schemes are pressing issues for programmatic buyers. Invalid traffic is contributing to the rise in budget waste and siphoning spending away from legitimate publishers, while MFA schemes are increasingly complex, eroding trust in the programmatic ecosystem.

Our take: The efficiency and growing relevance of programmatic comes with brand safety trade-offs, making transparency and stronger verification a prerequisite for sustained investment.

• Reevaluating partnerships with SSPs and DSPs is critical. Advertisers should prioritize partners who commit to third-party verification and prove deeper reporting granularity to ensure campaigns run in safer, high-quality environments.
• Adopting proactive fraud detection measures will prove valuable. Implementing independent fraud monitoring tools will help minimize invalid traffic and wasted spend.
• Human oversight should never be undervalued. Automation is a critical asset that works best when balanced with human checkpoints to ensure brand suitability and campaign alignment.