Programmatic agencies are overpricing garbage inventory, and the data proves it. This in-depth analysis reveals how inflated CPMs, low-quality placements, and misaligned incentives are draining advertiser budgets, and what you can do about it.

Introduction: Why “Programmatic agencies are overpricing garbage inventory” is a growing concern

Programmatic agencies are overpricing garbage inventory, and advertisers are finally starting to notice. Over the past few years, brands have poured billions into programmatic advertising with the promise of efficiency, precision targeting, and real-time optimization. On paper, it sounds unbeatable. In reality, the data tells a very different story.

Hidden fees, arbitrage-driven models, low-quality placements, and inflated CPMs are eroding trust across the ecosystem. Many advertisers are paying premium prices for impressions that appear below the fold, on MFA (Made for Advertising) sites, or in environments with little to no real human attention. The result? Bloated media costs and underwhelming performance.

This article breaks down the data behind why programmatic agencies are overpricing garbage inventory, explains how it happens, who benefits, and, most importantly, how advertisers can protect themselves.

The promise vs. reality of programmatic advertising

What advertisers were sold

Programmatic advertising was marketed as a smarter way to buy media:

  • Automated bidding
  • Hyper-granular targeting
  • Reduced waste
  • Transparent pricing

Agencies positioned themselves as expert navigators of complex DSP ecosystems like Google DV360 and The Trade Desk, promising scale with efficiency.

What the data actually shows

Instead, independent studies and advertiser audits repeatedly show:

  • 30–50% of impressions never meet basic viewability standards
  • A large share of spending goes to low-quality or MFA sites
  • CPMs continue rising while performance stagnates

This disconnect is the foundation of why programmatic agencies are overpricing garbage inventory.

Defining “Garbage inventory” in programmatic media

MFA sites and arbitrage farms

Made-for-Advertising sites exist solely to monetize ads, not audiences. Characteristics include:

  • High ad density
  • Thin or AI-generated content
  • No real brand affinity

Agencies often buy these sites cheaply, bundle them into “premium” deals, and resell at inflated CPMs.

Below-the-bold and zero-attention placements

Even on legitimate publishers, many impressions:

  • Load below the fold
  • Appear in stacked ad slots
  • Never enter the user’s viewport

An impression served is not an impression seen.

The data: CPM inflation across programmatic buys

CPMs vs. Viewability metrics

Internal advertiser audits consistently reveal:

  • CPMs increasing by 20–40% year-over-year
  • Viewability rates stuck around 50–60%

This means advertisers are paying more for the same—or worse—attention.

CPMs vs. Conversion rates

When CPMs rise, but:

  • Conversion rates stay flat
  • CPA increases
  • Incrementality declines

…it becomes clear the value isn’t there. The inventory cost is disconnected from business outcomes.

Agency incentives that drive overpricing

Arbitrage models explained

In arbitrage-based models:

  1. Agencies buy inventory at a low CPM
  2. Repackage it as “managed service”
  3. Mark it up significantly

The advertiser never sees the true clearing price.

Lack of fee transparency

Many contracts:

  • Bundle tech fees, data fees, and media costs
  • Avoid clear disclosure
  • Discourage log-level access

This opacity allows garbage inventory to masquerade as premium.

How DSPs and resellers compound the problem

Supply path obfuscation (SPO) failures

Without a strong SPO:

  • Multiple resellers inflate prices
  • The same impression is auctioned repeatedly
  • Advertisers overpay without added value

Cutting supply paths often reduces CPMs without hurting performance, a clear red flag.

Real-world case studies and benchmarks

Across multiple brand audits:

  • 40%+ of spend went to the bottom 10% of domains by performance
  • Removing MFA sites improved CPA by 25–35%
  • CPMs dropped while conversions increased

The conclusion is unavoidable: programmatic agencies are overpricing garbage inventory at scale.

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How advertisers can audit and fix the problem

Media audits and log-level data

Advertisers should demand:

  • Log-level impression data
  • Domain and app transparency
  • Viewability and attention metrics

Third-party auditors can quickly identify waste.

Smarter buying strategies

Effective fixes include:

  • Curated whitelists
  • SPO enforcement
  • Outcome-based KPIs, not CPM optimization
  • Direct publisher deals where possible

For further reading, see this industry analysis from AdExchanger.

FAQs

Why are programmatic agencies overpricing garbage inventory?

Because opaque pricing, arbitrage incentives, and weak oversight allow low-quality inventory to be sold at premium rates.

What is garbage inventory in programmatic advertising?

It includes MFA sites, non-viewable placements, bot-heavy traffic, and low-attention impressions.

How can advertisers detect overpricing?

By comparing CPMs against viewability, attention, and conversion metrics using log-level data.

Are DSPs responsible for this issue?

DSPs enable buying, but agencies and resellers often drive overpricing through poor supply path choices.

Does cutting inventory reduce reach?

Surprisingly, no. Most advertisers see better performance with fewer, higher-quality impressions.

Can programmatic still be effective?

Yes, but only with transparency, strict controls, and outcome-based measurement.

Conclusion: Cleaning up programmatic spend

The data is clear. Programmatic agencies are overpricing garbage inventory, and advertisers are paying the price through wasted budgets and weak performance. The solution isn’t abandoning programmatic, it’s demanding transparency, aligning incentives, and buying media based on outcomes, not impressions.

Brands that take control now will gain a significant competitive advantage in an increasingly crowded digital landscape.