Home Marketer's Note Publishers, Let’s Talk Programmatic CPMs

Publishers, Let’s Talk Programmatic CPMs


joannaoconnelrevised“Marketer’s Note” is a weekly column informing marketers about the rapidly evolving, digital marketing technology ecosystem. It is written by Joanna O’Connell, Director of Research, AdExchanger Research.  

I just had a very interesting conversation with a reporter who’s trying to understand why so many publishers link “programmatic” to declines in ad revenue and/or profitability in their quarterly earnings statements. I have strong suspicions on what might be happening, but I don’t yet have a firm answer on what’s really happening, at least not yet. 

Certainly, publishers will indicate that the volume of impressions they sell programmatically outstrips the revenue associated with those impressions (at least that’s what I found in my State of Programmatic Media report). But that isn’t a surprising statistic, nor is it a new phenomenon.  Certainly, this was the case when publishers relied on ad networks for indirect inventory sales.

So why is programmatic seen as the culprit for declining ad dollars? My suspicion is that many, many factors are at play.  Here are a few:

–       Ad networks sent nice, fat checks every month, without fail.  Publishers achieved consistent monthly revenue through those relationships, even if they weren’t optimized, or well understood, by some publishers.  In the programmatic world, there isn’t yet a clear replacement to the networks – i.e. a single entity that consistently buys up gobs of inventory, month after month.   I do anticipate, over time, this may change – with large advertisers like P&G investing mammoth sums of money in programmatic and agency trading desks increasingly striking holding company-wide deals the flow of consistent money will continue to grow.

–       Media buyers were happy to buy a lot of ROS, but aren’t so much anymore. The upside for buyers of audience targeting and impression level buying – hallmarks of programmatic – is control and choice.  But publishers don’t realize the same benefits, or at least in the same way.  Today, programmatic can mean a lot of (sometimes unintentionally) small buys for very specific impressions – laborious to sell and manage from a human capital standpoint (certainly more, I’d imagine, than days of yesteryear where publishers could contract for giant IO’s of ROS impressions). I believe, though, as standards continue to be developed and global yield management tools continue to be developed and are adopted, the human burden of managing many, many complex programs will start to lessen, and those programs – as a whole – will add up to strong overall revenue for publishers.

–       Programmatic necessitates new skills, which both publishers and buyers are still developing. We’re all still new at this, in spite of the fact that “programmatic,” in one form or another, has been around for several years.  Case in point: we’d finally started to figure out exchange-based buying and selling and along came programmatic direct and all its cousins – a whole new set of programmatic transaction types was born and we’re all trying to figure out how best to make it work*.  We’re still in a period of massive disruption – buyers and sellers are being asked to behave in totally new ways, and making attitudinal and behavioral transitions takes time for people.   So of course things are messy and suboptimal.

BUT, these are my suspicions only, as my experiences with publishers on this subject are many but anecdotal.  And I am sure this is not a complete list of culprits – just some starting thoughts. I’d like to hear from you, publishers, directly or via comments on the site – what is YOUR market reality with respect to programmatic and CPMs?


* I think we should acknowledge that RMX had the 1:1 relationship model very early – it just happened that the two parties were often networks.

Follow Joanna O’Connell (@joannaoconnell ) and AdExchanger (@adexchanger) on Twitter. 

Must Read

shopping cart

Moloco Invests In Its Competitor Topsort As The Retail Media Stakes Go Up

Topsort can lean into Moloco’s algorithmic personalization, while Moloco benefits from Topsort’s footprint with local retailers in the US and in Latin America.

CDP BlueConic Acquires First-Party Data Collection Startup Jebbit

On Wednesday, customer data platform BlueConic bought Jebbit, which creates quizzes, surveys and other interactive online plugs for collecting data from customers.

Comic: The Showdown (Google vs. DOJ)

The DOJ’s Witness List For The Google Antitrust Trial Is A Who’s Who Of Advertising

The DOJ published the witness list for its upcoming antitrust trial against Google, and it reads like the online advertising industry’s answer to the Social Register.

Privacy! Commerce! Connected TV! Read all about it. Subscribe to AdExchanger Newsletters

Why Vodafone Is Giving Out Grades For Its Creative

One way to get a handle on your brand creative is to, well, grade your homework, according to Anne Stilling, Vodafone’s global director of brands and media.

Inside The Fall Of Oracle’s Advertising Business

By now, the industry is well aware that Oracle, once the most prominent advertising data seller in market, will shut down its advertising division. What’s behind the ignominious end of Oracle Advertising?

Forget about asking for permission to collect cookies. Google will have to ask for permission to not collect them.

Criteo: The Privacy Sandbox Is NOT Ready Yet, But Could Be If Google Makes Certain Changes Soon

If Google were to shut off third-party cookies today and implement the current version of the Privacy Sandbox, publishers would see their ad revenue on Chrome tank by around 60% on average.