4 Questions That Ensure Transparency in Media Partnerships
It’s no secret that “transparency” is one of advertising’s biggest buzzwords this year.
It’s right up there with AI, ABM, Big Data, etc. At LumenAd, we speak about transparency all the time because it’s integral to our operation, but we don’t like to throw around words that lack meaning.
Beyond honesty and openness, transparency refers to a media team’s ability to track what’s working and make quick, data-supported decisions.
There is a science behind strong digital advertising strategy. Those who understand this science and who are armed with the data they need (as provided by transparent media partners) will make the right decision about where to put their ad dollars 99% of the time.
Anybody else is just shooting in the dark.
I chatted with Will Lapointe, LumenAd’s Senior Director of Media Services, about what he calls the “Corners of Transparency”: Cost, Margin, Inventory Quality, and Performance.
Truly transparent media vendors should be quick to share all of these metrics with their clients. Let’s dive into the 4 key questions any transparent media partner should be able to answer.
1) What’s the cost?
In other words, what rates does your media partner receive from ad-buying platforms?
Spoiler alert: Media agencies operate on economies of scale. DSPs (Demand Side Platforms) give lower rates to buyers of more ad inventory, which is why there’s room in this industry for media agencies.
Well, that in addition to the fact that good agencies come armed with media super-experts…
Regardless, everybody benefits from the lower rates that DSPs grant to media agencies and we don’t believe there’s a good reason to hide it.
Don’t be afraid to ask your media partner about their DSP rates. It’s a good place to start in determining the level of transparency you’re working with.
2) What are the margins?
If you know what you’re paying your media vendor and what they’re paying DSPs, you’re closing in on the margin being charged.
There are a few other key components to consider as well, though. For instance, a good media partner spends plenty on audience data, fraud protection, viewability, etc.
They also have hard-working employees to pay, a building to upkeep and every other form of overhead.
All of this is to say that margins are very necessary in order for media agencies to stay in business and to continue driving revenue on behalf of their clients.
Ask your media partner about their margins. If they give you a base percentage, they’re not painting the full picture, so be sure to dig a little deeper and understand where that percentage comes from and what sits behind it.
3) What is the quality of the inventory?
There’s a big difference between good and bad inventory. Low rates are great until you find out that your ad has been running on a scummy site or that it’s been displaying at the bottoms of pages where nobody can see it (hence the spending on fraud protection, viewability, etc. mentioned above).
Good inventory will drive much higher ROI than poor inventory, so this is a very necessary piece of the puzzle.
If your media partner isn’t willing to provide you with detailed information around your inventory quality, you should ask a few questions.
At the very least, your partner should be willing and able to quickly provide you with the following metrics:
4) How is my campaign performing?
In our opinion, this is the most important question your partner should be able to answer, as it supports everything else.
High cost and margins can be justified by strong inventory quality and performance (i.e., strong conversion rates/low CPA).
At the end of the day, what does cpm or margin really matter if it’s positively affecting your bottom line?
In Will’s words, “Low margins and CPMs are only exciting if they’re driving conversions.”
Otherwise, they’re just vanity metrics, and your media partner is using them to distract you from the broader goals of your department and your organization.
When we discuss performance, we’re talking about how much money it takes to drive more clients to your door.
You should always know how your campaign is affecting your bottom line. Clicks and views are not strong enough if you really want to understand campaign performance.
According to Will, “Transparency isn’t just a word you say or something you feel. It’s a formula. Digital marketing is not a black box – it’s a science.”
We have far too much information to just pour money into the system and wait to see what comes out.
A transparent programmatic machine should be more like an engine made of clear components. You put stuff in, turn it on, watch it run, and adjust the inputs as needed.
If you’d like a closer look at one of these “clear engines,” let’s get in touch. That’s LumenAd’s bread and butter.
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