Digital advertising costs are going up. Fast. If you haven’t felt it yet, you might want to check under the hood.
When we strip away all the bots and fake sites, supply plummets. At the same time, virtually every advertiser now prioritizes digital in their buy, so demand has skyrocketed. Economics 101 declares that the free market is going to tack on an extra digit to those CPMs because supply certainly is not unlimited, and there are 20 other companies who are chasing that exact same impression. You get what you pay for, and advertisers are wising up to the efficacy of targeting specific audiences with high lifetime value.
It’s important this trend is observed, internalized, and accepted. Those who fail to do so will be throwing their advertising dollars right out the window; those who successfully adjust will observe a tangible and measureable impact on their digital advertising costs.
What’s more, with advances in measurement technologies, we are now able to precisely parse recent online behaviors: the likelihood a consumer will have an affinity for a brand, whether an ad was seen, how long the ad was viewed, whether a site’s traffic is human and the list goes on. But these advances come at a cost.
While we can’t make prices go down, what we can do is help you to understand why this is happening in even more detail. Click here for free access to What’s Programmatic Costing You: An Insider’s Guide to Understanding the Rising Costs of Programmatic Advertising.
As we head into the new year and continue to keep an eye on the above-mentioned circumstances around digital advertising costs, there is yet another recent game changer: header bidding. Think of header bidding as a pre-auction in advance of inventory entering the open market so more players can participate in the “main event.” More competition is better for everyone, right? Well, yes. And no.
In an ideal setup, it improves forecasting, allows for access to every single impression and creates an even more level playing field for buyers. As it currently stands, however, some DSPs are unable to discern between a “header bid request” and an “open market request,” meaning win rates will plummet due to inability to precisely ascribe value to an impression. Unless you know exactly what an impression is worth to you, it’s spaghetti on the wall, and the wall is coated in oil. Hopefully, 2017 will see a reconciliation between technologies and automated communication, but it remains a challenge in the meantime.
As we’ve learned, digital is changing at a breakneck pace, and none of it is straightforward. Fortunately, Goodway Group has experts observing the minutiae and responding with nimble, calculated moves to keep our clients ahead of the curve. While 2016 was a year of changes and 2017 will undoubtedly bring a few unexpected turns as well, we know our clients will continue to benefit from our full attention. Contact us today to redefine your expectations of what 2017 can offer.
Digital State of the Union Series
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As director of account strategy & insights at Goodway Group, Nick uses math to help make clients heroes. Leveraging years of industry analytics experience from Digitas and Millward Brown Digital, he provides strategic advisement and knowledge development to ensure all client campaigns succeed. Nick believes that numbers tell stories and that good campaign strategy is a delicate blend of craft and science. When not talking programmatic, he can usually be found in his kitchen laboratory.