What "Ad Tech Tax"?

How much of every dollar goes to ad tech middlemen, versus "working media" (showing ads)?

5 studies since 2015 have shown that 30 - 60% of every dollar a marketer spends in programmatic channels goes to ad tech intermediaries. Every single company in the Lumascape at the bottom are for-profit and trying to maximize their own revenues. That is their top priority, even if they are actually trying to help marketers do better digital marketing. The question marketers should ask themselves is whether the juice is worth the squeeze — whether all the ad tech costs are driving incremental business outcomes. Yeah, incremental is key. If it didn’t drive incremental business and the business would have happened anyway, why are you incurring all of the extra ad tech costs?

In this recent experiment, 1 cent and 10 cent CPMs paid by me, the advertiser, resulted in 0.76 cents and 7.6 cents being bid by the exchange. That means the maximum the publisher could have gotten was 0.76 cents or 7.6 cents respectively. The “markup” taken by the exchange was 32% (24 cents / 76 cents). The mark ups are smaller on $1.00 and $2.50 CPMs.

Australian Competition & Consumer Commission, Dec 2020. Note the data was supplied by ad tech firms (so expect it to be skewed)


Competition & Markets Authority July 2020 - 65% went to publishers for showing ads.


ISBA study from May 2020 - 50% goes to publisher for showing ads.

Also note the 15% that went missing. That was the average; the range was 2% to 86% went missing, depending on the campaign.


From my own tests, about 57 - 63 cents on the dollar goes to showing ads.

ANA study from 2017 - $0.54 - $0.61 goes to publisher for showing ads.


WFA study from 2016 - 40% goes to “working media”