If everyone has access to the same inventory, why wouldn't I purchase inventory at the cheapest possible price point, no matter where it is available?
All inventory is not equal, and everyone does not have access to the same inventory. While many publishers do make their inventory available within multiple ecosystems (both networks and exchanges), the inventory is very different in each.
For example, an ad network may have a strong publisher relationship that allows for upper funnel, high value access. That ad network would purchase the non-reserved media from the publisher at a premium price to ensure that the publisher is getting optimal value for their inventory. Once that publisher has sold its entire valuable inventory, there may be inventory left that is low funnel, high frequency, and not very valuable. That lower value inventory would go to the exchange to be bid on and drive as much revenue as possible for the publisher at that value level. So while you could purchase inventory from many of the same publishers on both ad networks and ad exchanges, those impressions would not be of equal value to your campaign.
When evaluating inventory, it's important to look beyond the URL. Are the users the same? What is the frequency of the impression? What is the frequency of that user overall? Are the impressions within the publisher on the same pages? Are they above the fold or below? What engine is bidding on your behalf to buy those impressions, and how is it calculating its bid on your behalf? Keep in mind that you get what you pay for.
Why would I run with a network on a CPA when I can target audiences and data on a CPM with a DSP or exchange?
Agencies and advertisers should evaluate direct response efforts against KPIs like effective CPA and ROI (ROAS). A CPA guarantees you a particular cost per action, while fixed CPMs, dynamic CPMs, and targeted audience buys with DSPs and exchanges can put some risk on the advertiser. Any of these metrics might "work." But, ultimately, it is about backend performance and scale no matter the metric, eCPA on the initial conversion or the eCPM on the media buy.
Evaluate the scale and quality of the actions your non-reserve partners are driving. Many networks have spent years developing deep publisher relationships that reward the highest quality, best performing inventory. A heavy skew toward bottom of the barrel remnant inventory can net you better eCPMs, but it also confines your presence to lower quality inventory, limited scale, and -- eventually -- lower quality bookings on the backend.
Networks are not limited to CPA alone. Most networks are capable of and happy to offer other metrics including CPC, CPM, and eCPM. Moreover, the most advanced networks are as integrated into third-party data providers, DMPs, and targeting solutions as ATDs and DSPs. This makes programmatic buying not only possible, but scalable and capable of being optimized.
How does the AOL-Microsoft-Yahoo alliance affect network buys?
Advertisers now have a broader opportunity to reach targeted audiences through premium network display advertising, aligned with one's marketing objectives. Advertisers cannot buy only one inventory source, but instead must buy from a pool of approximately 50 inventory sources. For example, an advertiser cannot come to AOL and just buy Microsoft or Yahoo inventory, but is able to purchase it in a pool of premium inventory.
We all want marketers to benefit from enhanced choice around premium inventory and scale of their digital spend. This partnership allows the three partners to have greater access to premium inventory to offer clients that will achieve the benefits of scale and efficiency.
Greg Skipper is director of East Coast sales at Advertising.com.
On Twitter? Follow iMedia Connection at @iMediaTweet.
"Children are playing on green meadow examining field flowers using magnifying glass" image via Shutterstock.
