Advertiser asks, "Why Would Publishers Allow Dynamic Pricing?"
October 27th, 2005
On its surface, it seems counter intuitive to adjust the CPM bid price, often adjusting down for an advertiser, but in fact, there is a compelling reason for it. How many times have you heard a media buyer say after their campaign has been running, “publisher X, you’re not hitting my goal, you need to ‘optimize or we’ll have to cancel the buy.” If an advertiser is not hitting reasonable ROI metrics established on the campaign, there are 3 options: 1. keep price the same, miss the target goals and eventually lose the advertiser, 2. optimize potential inventory out of the campaign through frequency capping or manual removal of sites, sections or placements. The third option is a new Right Media option - 3. adjust price to match the value of the inventory (based on ad call variables), do not remove any inventory and hit the ROI goals.
Before Right Media’s Yield Manager, the choice with all ad servers was optimize by negation or lose the campaign. Adjusting price based on the value of the inventory to the advertiser is the only way to keep the advertiser relationship AND maintain enough access to inventory for a long term scalable campaign. It works in theory and in practice. Several of the same advertisers that started working with us 2 years ago are still with us, and we’ve added many more.
Bringing it back to the publisher, by allowing price to vary on each ad call based on the advertiser’s ROI goals, we create competition for every single ad call from a publisher. Competition among hundreds of advertisers is better than selling your inventory to one buyer at a large discount.
Publishers get competition for their inventory. Advertisers get ROI driven Dynamic Pricing. Long term relationships are built based on the fairness to each and their goals.
