Data-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Kence Anderson, CEO and founder at Apptimyze.
There's a dirty little secret in ad tech: All sorts of fees and charges are hidden in the cost of your media.
Various players in the ecosystem — from agencies to tech startups, and even more established platforms — provide services like campaign setup, creative production and data analysis that are difficult to bill and charge for. The players recoup these costs by bundling them into the cost of the media they sell or by piggybacking a percentage of media onto the total media cost.
Here’s an example from the world of display providers. For them, setting up a campaign for a brand client is a complex process that includes building the creative, setting up the campaign in their system, trafficking, monitoring and optimizing. All these things are really difficult to charge for on a line-item basis, but providers must complete these tasks in order to deliver their secret sauce.
As a coping mechanism, vendors bundle these services into the cost of media. They can sell the media themselves, like Rocket Fuel, Chango or Criteo; otherwise, providers tend to recoup their costs by charging a percentage of the media in the form of a cost per mile or cost per click. This makes it easier for the brand to digest everything the provider is doing for them. They know they have to pay for media, that it’s expensive and that along with it they will get a lot of cool functionality and measurable results.