OnDemand WTP Pricing Research

It’s Clear, Financial Transparency Is Better for Display Advertisers | Digital Marketing Blog by Adobe

Is a transparent pricing model from a display advertising vendor in the best interest of the advertiser or is a black box approach better? Can display vendors who show their fees and media costs provide the best combination of performance plus transparency? I believe it’s yes that transparent pricing is in the best interest of the advertiser.

Not All Display Vendors Have Transparent Fees

Some display vendors provide transparent pricing models. Other vendors have a black box approach. They roll up all the costs and charge a flat CPM (cost per thousand) or CPC (cost per click) rate so the advertiser has no idea what the actual margin is and if they are paying a fair price. For nontransparent vendors, markups and profit margins can vary. We can see from the filings for display vendors that have gone public that mark ups on media cost can easily be in excess of 50 percent, some much higher. I saw one test where a Facebook Ad Exchange (FBX) retargeter was charging the client a $1.50 CPM for FBX ad inventory. Adobe buys FBX ad inventory for about a $.50 CPM, meaning that the vendor markup was as high as 200 percent.

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It’s Clear, Financial Transparency Is Better for Display Advertisers.

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