“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 Elise Stieferman, director of marketing and business strategy at Coegi.
You get what you pay for. This adage is considered way too infrequently in the world of digital advertising, especially programmatic. There is so much pressure placed on gaining efficiency, both in execution and cost, that marketers have begun to prioritize “added value” impressions over meaningful business results.
But efficiency, while important, does not equate to effectiveness.
So how can marketers change the narrative around programmatic CPMs?
Accept the cookieless future
An audience-first approach has long been considered the gold standard for programmatic advertising, identifying the right people using a carefully curated set of data providers. But as cookie-based audiences disappear in 2023, the audience-first approach will have to shift as well.
That doesn’t mean the consumer should no longer be at the center of our strategy. Instead, it means we will have to get more creative about how we reach them. That includes more robust contextual targeting, which gives publishers a lot of power over the ad slot availability and the costs.
Open exchange has historically been a key driver of low CPMs since it is typically based on second-price auctions, with marketers setting their spending thresholds. As we explore more private marketplace deals and direct-to-publisher buys to complement open exchange buys, costs will inevitably grow.
Acknowledge the value of premium inventory
All impressions are not created equal, even with exceptional targeting data. Serving ads where they are barely readable, below the fold or amid spammy content will be cheaper. But that doesn’t mean it created a meaningful brand exposure or that brand safety was guaranteed.
That’s why it is important to balance audience targeting with premium content. Spending the extra dollars to run on quality high-traffic blog sites, Hulu or a reputable news site will have a higher likelihood of better performance while also elevating your overall brand perception.
There needs to be a tiered approach to inventory that balances overall costs and reach, ensuring there is both scale and impact. This is especially true of challenger brands that may not have massive budgets but are looking to make a splash in the marketplace.
Prioritize success over cost
Yes, cost efficiency is important. But effectiveness is priceless. Though scale is necessary to reach critical mass, placing quality over quantity is a critical component of the marketing playbook. You can’t report CPMs to your board of directors and expect them to be impressed or understand the worth of your campaigns. So why are CPMs still considered a KPI?
All marketing initiatives should be rooted in success metrics that indicate whether you are making headway toward your business goals. The power of digital lies in the data available at marketers’ fingertips. Reducing campaign success to CPMs is the equivalent of reducing success to GRPs for linear television – another obsolete measurement standard the industry is quickly abandoning.
It’s time to recalibrate to focus on meaningful metrics and give impressions a rest.