Rob Kay is the Director of Customer Success at Integral Ad Science. Rob is also a member of the IAB SEA+India Programmatic Committee who produced the following article to dispel common myths within an ever increasingly complicated ecosystem. How can advertisers and publishers know all players connecting them as part of the supply chain and the value that each brings? This article looks to shift the focus from a price led discussion to performance and strategic fit as marketers come under increasing budget pressure.
There has been heightened interest and demand for transparency in programmatic advertising especially with the recent release of the ISBA Programmatic Supply Chain Transparency Study. The growing complexity in the ecosystem means the advertiser no longer knows every player in the ad-supply chain that connects them to publishers and the value that each brings; this causes ripple effects to verifying return on investment (ROI) by each player and effectively for the publisher a lower revenue distribution. This has led to a lower percentage of budget that publishers take rate on average becomes the benchmark for comparison—but should it be the key performance indicator (KPI) for building a healthier ecosystem?
As Duracell’s Head of Digital, Jon Ones mentioned in his interview with Digiday, “both quality and pricing relative to business requirements must be assessed” and there are other success measurement indices for consideration.
This article aims to shift the focus to performance and strategic fit, the two things that should matter more to advertisers, by posing some questions to help determine who they should work with for how much. Before we try to force transparency out of all the partners in the supply chain, it would make sense to first evaluate the value they each bring to the table and how much that value is worth.
The general belief is that programmatically traded media should deliver better performance than direct Insertion Order (IO) inventories, if we are to compare them without factoring in the fees. Trading platforms are built with machine learning algorithms where optimizations are made automatically based on a large volume of data that humans are incapable of processing in a short amount of time. The data used for programmatic trading can also be made available to advertisers, and such transparency can give advertisers more control over their campaign performance. However, fees can easily offset the efficiency, and direct IOs can be more economical especially if combined with unique creative solutions or value-add “free” impressions that publishers offer.
No one option is always better than the other as factors such as target audience size, advertising budget, and media channels can lead to different conclusions. Advertisers may only know which buying method is better for their brands through testing – only careful planning and execution will deliver the data they need to make a decision. It is the advertisers’ responsibility to ensure that they are making an apples-to-apples comparison. Here are some guiding questions for a fair evaluation:
- Does the KPI for the campaign(s) align with your business objective? If it’s a proxy, is there a different metric that may be closer to how you measure the business success?
- Are the KPI and the benchmark the same for both buying methods?
- If brand safety measures have been placed on programmatic campaigns, should the same be set up for direct IO campaigns?
Many pricing discussions often make ad tech partners seem like commodity platforms; however, the truth is quite the contrary. While there is some consistency, each platform is built on different beliefs and has a distinct personality. This influences how they price their product and offer deals and discounts, so it’s important for advertisers to find a partner with a strategic fit to their business. Savvy advertisers communicate their goals for the partnership before negotiating rates to allow platforms to tailor their services and pricing. Product pricing may be different for advertisers in the same industry vertical if their priorities are different. Viewability might be a critical hygiene metric for advertiser A, but advertiser B might care more about supply management flexibility for the deals they source.
Here are some guiding questions for finding the right strategic partner at the right price:
- Can we increase the volume commitment for lower rates?
- What are some hard-built costs?
- What are the premiums offered, and how do you define premium?
- Can the platform offer automation that cuts down the hours currently required to execute a campaign?
It is critical that advertisers understand the values and standards of their supply chain partners to determine the fair price they are willing to pay for the service offered. At the end of the day, it is their money they are investing, and they should aim to take more control by asking the right questions. Trust and transparency can be achieved only when both parties are ready to engage in a strategic conversation and be clear about what it is that they aim to accomplish through the partnership.
Authors & Contributors
- Robert Kay, Director, Customer Success, Asia Pacific, Integral Ad Science
- June Oh, Regional Director, Account & Partnership Development,Southeast Asia, Greater China & Korea, Mediamath
- Mengyu Zhou, Head of Sales & Partnership, Asia Pacific, Dailymotion
- Rohan Lightfoot, Chief Growth Officer, Mindshare Asia Pacific