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Programmatic – Out of site is money out of your pocket

There is an old saying ” Out of your Sight is out of your mind”. Well this is so true when you don’t lose a single paisa. In case of programmatic “Out of sight is not out of your mind” but it is also “Out of site is money out of your pocket”.

What every media investor should know?

Marketing and Advertising Money Flow. Let me pass this message via a image. Below is a model for how money may be split between the various stakeholders, in the typical programmatic stack.

Programmatic Buying in India - Money Flow

Here, both Agency Of Record (AOR) and ATD (Agency Trading Desk) receive a share of advertiser spends. A or Multiple DSPs are typically licensed by ATDs, rather than owned, a share of spends also goes to the companies providing these services. ‘Value-adds’ are additional technological services, including data enrichment, targeting, reporting, verification, authentication and others. Value-adds account close to 25% of advertiser budgets.

The exchange is the virtual marketplace itself where publishers trade impressions with media buyers. Exchanges account for around 5% of advertiser spend.

After all split taken on advertiser spends by  stakeholders present in the programmatic ecosystem, a share of 40% advertisers budgets is by the publisher, as so called ‘working media’

On a survey conducted to know if trading desks are more or less transparent than “traditional” methods of trading;

It is clear that better management of the suppliers, publishers and partners involved in the value chain can immediately yield improved visibility and ROI for the advertiser.

Once there is total clarity, anyone can benchmark to work from and optimize against.

As any traditional media, tracking the results over time will empower to make smarter decisions as programmatic continues to evolve.

The first two chart bars (look below) are straightforward. Brands know their budget (and their bills) and how much they pay their agency. (Note: you have to convert gross fees into net fees).

Programmatic Buying in India - Spends Flow

The next trading stack toll is the Trading Desk and DSPs. In case of ATD, it probably runs some form of arbitrage driven out of clients spends. Stakeholders at the brands side need to know how these numbers shake out.

In other cases, the trading desk outsources actual trading to a managed service DSP that typically takes a large black-box margin. While it’s hard to understand the value-add of assigning an account manager who assigns yet another account manager to get the job done, this practice is all too common, non-strategic and symptomatic of programmatic complacency.

Adding salt to the wound, agencies also strike volume kickback deals with DSPs and then throttle media spend one way or the other in order to fully exploit the deal. This sub-optimal and poorly aligned setup results in unaccounted-for media waste, ranging from poor-performing DSPs (all fishing from the same pond), to viewability issues and many other flavors of impression and click fraud. The good news is that it’s all largely avoidable.

So, no matter which way a particular brand cuts it, the end result is the same: inefficient media allocation that could easily be put to work to better meet the brand’s intended objective.

It is time for brands to ask “bid-level” data. 

Until you ask for “bid-level” data, it’s practically impossible to properly account for your programmatic budget and build a plan to optimize it. The good news is this can be obtained today simply by asking for it (at the log level) or switching to more transparent partners who are willing to provide it.

Robust and complete bid-stream data is very valuable on its own. (This could have been more valuable when used in conjunction with other DMP data sources).

Remember, Out of site is money out of your pocket — so get into the groove and know today! More brands start to get the programmatic mandate done, they will know and control way more, nobody bleeds, and the programmatic market will grow exponentially and become more valuable.

About Ryan Govindan (17 Articles)
Father of ViVa, data-driven marketer, digital marketing professional and a doer.
Contact: Website

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