Better metrics may help online ad buys
Publicis Groupe Media recently partnered with Rapt to provide its digital media agencies with supply, demand and value data on digital inventory across the marketplace. Since the announcement, transparency and efficiency in pricing have become catchphrases for the company, as it touts a sea change in the buying process.
Such openness with information provides greater efficiency in the buying and selling process, says Tim Hanlon, EVP at Denuo, the media futures practice of Publicis. He and Jonathan Bellack, VP of publisher core products at DoubleClick, both highlighted the importance of data integration, which helps companies working together to see all the same information at once.
Hanlon advises, however, that buyers and sellers agree on common values and terms before data can really be shared. A number of metrics are applied to digital ad buying and selling, depending on the type of campaign that's being waged. Branding efforts focus on CPM, whereas action- or results-oriented inventory is often measured by cost-per-action, cost-per-sale or cost-per-click counts.
“We need both sides to agree on common metrics and valuation structures that both sides understand,” Hanlon says. “One of the major things we're doing with Rapt in the early stages is get to parity on definitional issues, so [we're] talking the same language when it comes to advertising availability.
“Unless you agree on opportunities, you can't begin to do the horse trading of buying and selling,” he continues. “Part of the challenge will be to get everyone on the same playing field in terms of what's available and how we value it.”
Other companies have seen this need as well. Ad exchanges like DoubleClick Advertising Exchange and AdECN are working to bring buyers and sellers together in a shared space.
AdECN COO Jeff Green explains, “We're creating a marketplace where networks can come and trade with one another. Ad networks come to our exchange to participate and share inventory and our whole model is based on transparency and pricing efficiency.”
Bellack is in favor of such ad exchanges, saying that exchange-based sales models go beyond transparency, to dynamically finding the right price for a given media buyer for a given sale on a particular piece of inventory.
The complexity, breadth and sophistication of the digital ad-buying marketplace, experts agree, demand an open and dynamic market approach. Green notes that digital advertising has so many nuances that a more efficient pricing model is needed.
“There are so many variables that go into price and performance,” he says. “Digital is different than other media because it has so many locations, and those have a dramatic impact on how people respond. It requires more efficient pricing than any other media.”
And, while many in the industry see moves being made toward transparency and efficiency, there is still work ahead.
“It's definitely a general movement,” Green says. “I think everybody is just getting better at pricing, giving people more control.”
He adds, “I think agencies are beginning to open up — and sometimes they are the slowest to move to change. They're beginning to open up to other pricing methods and are more open to bidding on display and other forms of online advertising.”