There may be no better indication of the rising cost of digital advertising than a little missive Google sent out earlier this month to its ad buying customers.
In a number of countries that are taxing digital ad placements, the big ad firm will be adding surcharges to cover those increases. Sounds pretty standard, huh? Lots of things are taxed.
Yes, but things that are taxed are generally money-makers. Governments may be stodgy, hind bound and in love with their own red tape but like everyone else, they know how to follow the money.
These days, digital ad sales is a big business and the tax man wants a taste.
Google’s tax dilemma underscores a reality: the super cheap CPM (cost per 1,0000) is fading into history.
All Spot-On can say is “Good Riddance.” One of the dumber ideas floated for political campaigns was the notion that search advertising offered a particularly good deal for campaigns because buyers only paid for ads that got clicks. Those “free ads” appeared to lower the cost of each ad.
That thinking took root. A lot of ad sellers like to figure costs by taking a campaign’s total ad buy and dividing it by the number of displayed ads – regardless of engagement. The result is a lower price that ignores waste – all those ads that viewers ignored – in favor of volume.
A more accurate measure would be to take the successful ads then divide by total cost. That raises price for engagement but gives a buyer a truer picture of the result of their spend. If you spend $10,000 to buy 1 million ads your CPM is $1. But if only 50,000 of that 1 million garnered a click your real cost $200 per ad.
Many political ad buyers remain in love with this spray-and-pray approach, even as the tide is turning. Budget pressure is the main reason, of course. Campaigns are accustomed to spending big on TV, mail and field – all established outreach – often have difficulty coping with another demand on resources. And many buyers still don’t see how 1 million ads at $1 each is a bad investment.
But it’s time to refocus this conversation. More and more attention is being paid to the hidden costs of the low priced CPM. Fraud is the main culprit here. The programmatic ad market is riven with content farms posing as editorial sites, server farms pretending to display ads to real viewers and just plain human carelessness.
All of which is getting to be more important as the platforms raise their prices. Facebook and Google are charging more this year than they did two years ago but much of that cost isn’t solving waste or fraud problems.
You pay for what you get. Buy cheap ads in volume. get questionable results. This is why a TV ad on the “A” block for local news costs more than the Home Shopping Network at 2 a.m.
Direct placement solves this problem for online buyers. Ads run on known outlets at specific times with established delivery metrics. CPMs are higher but so is quality control and transparency.
Spot-On has been preaching the value of direct ad placements for political campaigns since we started our business. We’re going to stick with it. In fact, we’ve built an ad buying platform that helps political and advocacy efforts maximize their spending on reliable, known outlets frequented by voters.
Buys placed via our Pinpoint Placement platform go to known outlets. Buyers know where the ads run, when they run and how they’ve performed. Voters see these ads, not bots.
Want more info about our Pinpoint Placement platform? Drop us a line and we’ll tell you all about it.