There may be no better indication of the rising cost of programmatic 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. Digital ad sales is a big business and the tax man wants a taste.
Google’s tax dilemma underscores a new reality: the super cheap CPM (cost per 1,0000) is fading into history. Put simply: Direct ad buying is gaining pricing parity with programmatic.
Many political ad buyers remain in love with the spray-and-pray approach, even as the tide is turning. Budget pressure is the main reason, of course. Campaigns 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.
That doesn’t mean publishers should jack their political rates. If you’re running a news site in a swing state that’s getting lots of attention from federal campaigns and Super PACs, you may have some room for revenue “enhancement” but for most races in most states, budgets are tight and soft money – PACs, third party supporters – is scarce.
The conversation about pricing, however, is being refocused. More and more attention is being paid to the hidden costs of the low priced CPM and the viability of direct buying. 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.
As every publisher knows, direct placement solves this problem. Ads run on known outlets at specific times with established delivery metrics. CPMs are higher but so is quality control and transparency. These are all solid selling points for any local news outlet.
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.
Even better. Buys placed via our Pinpoint Placement platform are from known buyers with active political campaign practices. Our platform doesn’t send bots, deep fakes or fictitious advertisers; we know them and we make sure they know you. You get one-stop creative review, too.
Want more info about our Pinpoint Placement platform? Drop us a line and we’ll tell you all about it.
