One big struggle for publishers is managing their daisy chain. The need to constantly re-order and gather data from multiple sources takes incredible amounts of time away from site and business development resources. One complication that many may not be aware of is how accurate the data is that they are using to make these decisions.

With Yield Manager, I was able to do some research on this to find some surprising results. 

This case study involves real data from a YM publisher who is trafficking in 3^rd party tags from another network not affiliated with YM. Using the competition and auction capabilities of YM, the publisher wants this 3^rd party advertiser to serve when it is predicted to be the highest paying ad at the time of the ad call. Since it is critical that the 3^rd party numbers that are transferred to YM have minor discrepancies, we wanted to see just how accurate the data was coming from the 3^rd party network reporting. 

We will assume that the number of ad calls sent to the 3^rd party network is accurate based on YM reporting. When we compare the YM impressions to the 3^rd party network, we see the following:

We instantly see that the number of impressions being reported, even when you factor in the expected defaults that were served, is substantially lower than the number of ad calls sent to this network from YM. Over 30% of the impressions sent were not reported. This tells you that the eCPM being reported is not accurate and you are allowing lower paying ads to take precedence over other ones which would possibly pay higher. You can see by the next graph that the eCPM that YM is basing its auction on is very inflated because of the huge discrepancy of impressions being reported:

When you keep going down the path of discovery here, you end up on the bottom line, which is revenue. Using simple math to turn impressions and eCPM into revenue, you can see how much opportunity is being lost by allowing the 3^rd party numbers to dictate better delivery over other advertiser who would really pay more:

After all is said and done, this publisher was sending impressions to this network expecting about $75 from this 3^rd party network. The end result was really only $42. That lost revenue could have been and should have been monetized better. It is pure speculation why 3^rd party networks would use these reporting practices. They may want to maintain a consistent eCPM so that publishers will put them in their chain based on “this network pays me 0.30 and this one pays me 0.15”  If those numbers slip to their real amount, that network would be moved down the chain. Networks probably rely on the publisher not looking deep into the numbers and just accept what they are told and get paid what they say they are due. 

One way that we would like to add clarity to this process and aspect of the publisher business is by creating a new tool called sYMple (name change pending). This product will be able to gather and accurately monetize all of the networks in your chain. The mystery of not knowing which will pay better on a day to day basis will no longer be guess work. We will be able to determine an aggregate value of your entire chain and run the auction accordingly, giving the publisher the highest paying ad at the time of ad call, with reporting and ad serving features that can accommodate everyone they work with. There are many more exciting ideas we have for this product, so stay tuned as it is developed and rolled out to Right Media publishers, existing and new. 

This entry was posted on Wednesday, January 11th, 2006 at 12:00 am and is filed under Publishers, Network Media Exchange. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.