Agencies And Publishers Go Head-to-Head Over Automated Ad Buys
Major publishers say they will continue to resist ad agencies’ media buying exchanges for fear of further driving down premium CPMs and losing control of lucrative audience data. The issue was one of the big debates at the Interactive Advertising Bureau’s annual meeting, Mediaweek reported and the two sides appear to be far apart. For the agencies’ part, the use of Demand Side Platforms — examples include real-time bidding exchanges run by Publicis’ VivaKi and Interpublic’s Cadreon — allows marketers to buy and target with much less waste and makes. They also argue that the premium ads are more relevant to a site’s visitors and therefore, makes the environment around publishers’ content less obtrusive.
Whether the publishers or the agencies are right about the effect of DSPs is beside the point, since advertisers will always adopt any technology that promises greater ROI and more efficient media buys. As David Moore, chairman of WPP’s 24/7 Real Media, put it, “The ability to maintain pricing for these premium properties is going to continue to decline. They are asking for $20, $30 and $40 CPMs, which are four- and five-times higher than [what DSPs can yield]. There are no must-buys anymore.“
Despite the rise of the exchange model both within and outside of the agency structure, Russ Fradin, CEO of vertical ad net builder Adify, said publishers could regain the upper hand by either selling all their ads directly or handing the complete sales process over to an outside firm that will protect the user data they collect and maintain control on their premium prices. The current “hybrid” model of offering some ad inventory across remnant ad nets and other automated buying systems is simply killing publishers’ brands.
For the most part, the issue is being driven by the increased uncertainty of the lingering recession, which has held back the ad recovery for both agencies and publishers. Ultimately, as the economic weakness persists, and both sides reduce the numbers of actual buyers and sellers, the automated path will likely lead to more arguments and ultimately, some form of grudging acceptance on the part of publishers.
DSPs are simply Ad Networks run ad agencies. Designed to take back some of the revenue that the middle men are currently garnerin. It would seem hard to believe that premium publishes would make th exact same mistake again that they made with the ad networks but hey anything is possible.
The real question in all this will be who owns the data, how was it procurred and what is it being used for. Right now the only type of data targeting (behavoiral targeting) that works is close to immidiate retargeting. Most of this is simply a head fake by the agency holding companies to maintain some semblance of their waning business model.
At the of the day the clients will expect agencies to place the lion’s share of their buys directly while the agencies will work to put the lion’s share through their DSP. The hard reality for agencies is that if the DSP model works, clients can do it better and cheaper themselves…it is a cold world for ad agencies right now to be sure…maybe even colder than it is for publishers.
As the article stated, online publishers might want to consider taking control of their CPMs by selling their ad space themselves. But this can take an enormous amount of time, money and other resources just to get started. Another alternative is to consider an ad sales management firm. Our company, Intermarkets, Inc. is the premier ad sales management firm for online publishers. We’ve been doing this since 1997. We act as your inhouse ad sales manager by directly selling your advertising inventory, trafficking, maximizing results and reporting. We take on all the collection and credit risk too. Visit us at http://www.intermarkets.net.