Latest / The Yield Doctor with James Deaker / How to Track Digital Ad Prices Over Time (Without Guessing)

Transcript

How to Track Digital Ad Prices Over Time (Without Guessing) · The Yield Doctor with James Deaker

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  one thing that a lot of people struggle
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  with in digital media pricing is
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  understanding how the prices for
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  advertising move over time and this is
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  because a lot of the pricing is opaque
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  unlike in consumer goods where you can
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  just look up the price in a search bar
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  the price for digital media is
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  fragmented it's
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  non-transparent and often it can vary
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  from one buyer to another so what do you
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  do if you're in a pricing or yield
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  management team and someone either your
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  boss or the head of sales comes to you
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  and says I saw last month that the
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  pricing yield for our company was flat
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  on our
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  advertising how does that compare to the
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  industry I used to hate this question uh
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  because usually the person asking it
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  wants a simple answer they don't want to
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  hear it depends on what form format that
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  you're talking about or it depends on
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  what you consider the market or it
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  depends on who you consider our
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  competitors so let's set that aside but
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  talk about the big buckets I'm going to
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  talk about the pros and cons of four
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  different sources of information that
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  you can turn to for thinking about how
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  prices are moving over
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  time the first is the measurement and
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  ratings companies the companies I am
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  going to list uh are not necessarily
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  going to like the fact that I'm grouping
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  them together but I'm going to do that
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  anyway and here we're talking about
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  companies like neelson and
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  commcore they are traditionally
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  companies that would look at audience
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  counting things like the number of users
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  on a site or on a Channel or how much
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  time the users spend on those sites
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  however over time they have expanded
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  into other areas including those related
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  to revenue and
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  pricing now there are also other
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  companies that are more specialist
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  companies and here I'm talking about
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  companies like stack or pathmatics these
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  tend to be small companies and they
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  specialize in getting deeper into the
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  Dynamics associated with pricing of
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  individual ads and so there are
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  different companies but regardless of
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  the company that you're looking at there
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  are a few things that you need to be
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  careful of when you're using these
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  sources one is that they may be strong
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  in one region but not in others and this
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  is traditionally true where they may be
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  strong within the us but not as strong
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  internationally they may be strong in
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  one format for example digital banners
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  but not as strong in Native ads or in
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  video they may be good on one dimension
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  for example I mentioned counting of
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  Impressions but bad in another area
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  where you need for pricing for example
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  the revenue side of the
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  equation or they may rely on small
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  samples of data for example consumer
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  panels or some sample of
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  Impressions so when you're evaluating
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  these different companies you need to
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  ask yourself all of these types of
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  questions in my experience and again
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  this is just an opinion the large
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  measurement companies like comcore and
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  neelson are very good accounting ad
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  temperation data but they are generally
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  much good and much less reliable in
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  looking at things like pricing Trends
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  and that is because the information they
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  have about the revenue is less reliable
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  the smaller companies that are focused
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  on pricing like stack and pathmatics
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  could provide some interesting pricing
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  trending data but you have to accept
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  that they don't have the same footprint
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  as a company like neelon and comcore and
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  they don't have insight into the
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  Dynamics around make Goods bonuses in
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  other words there are areas where they
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  can't be relied on so in summary for
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  bucket one which is the measurement
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  companies their strength is that they
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  potentially are reliable and consistent
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  form of data the weakness is that they
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  often have systematic biases that the
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  user is is not aware
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  of basically you have to work with the
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  measurement and pricing vendors and you
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  have to work with at least one or two
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  over time consistently but you're going
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  to find that they are not perfect and
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  you're going to have to explore other
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  sources to buttress that
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  information so let's turn to what I'm
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  going to call Source number two and that
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  relates to the earnings of public
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  companies here we're talking about
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  companies where that have quarterly or
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  annual reports that public company's
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  issue for example some companies in the
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  advertising business it will be their
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  line main line of business so you can
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  look at aggregate reports it will give
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  you a good indication on how their
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  advertising business is changing over
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  time unfortunately for some companies
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  that we might be interested in for
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  example a Microsoft or an Amazon their
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  advertising or their search business may
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  just be one line of business so their
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  ability to see what is going on in
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  advertising may be limited
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  for context uh I'm recording this in
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  2024 and over time the companies that
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  I'm going to mention may change but the
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  themes are going to remain the same for
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  example if you are interested in Native
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  ads you are going to scrutinize the
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  earnings reports of companies like
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  tabula and
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  outbrain if you are interested in retail
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  media Networks you're going to look at
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  companies like Amazon and Walmart if
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  you're interested in search you're going
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  to look at Google and
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  Microsoft if you're interested in
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  general adtech you're going to start
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  with the trade desk and some of the
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  independent ssps like magnite but in
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  general if you're looking at industry
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  Trends you're going to start with Google
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  so let's look at the commentary of in
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  those quarterly and annual reports and
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  we want to start looking at changes and
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  Trends so here's just one table from
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  their latest earnings report this table
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  shows that they experienced very
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  different Dynamics across search YouTube
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  and open web advertising the first two
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  were growing very well but General web
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  open advertising has been shrinking and
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  this could be due to a host of different
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  reasons but it makes us at least
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  consider the hypothesis that nonv video
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  display advertising is underperforming
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  video content like YouTube or search
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  content there are other things that you
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  need to be careful of in reviewing these
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  types of reports one is that the biggest
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  companies at least through the last few
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  years have been outperforming the
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  overall market for a number of years in
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  other words if you only looked at the
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  biggest public companies you'll have a
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  warped sense for how well the industry
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  is doing and the pricing
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  Dynamics so in summary for the source of
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  information public companies the
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  strength is is that they have actual
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  performance data the weakness is that it
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  only comes out every 3 months and it's
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  going to be aggregate data and not all
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  companies especially those that aren't
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  public have to
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  report let's turn our attention to the
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  third set of pricing information which
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  is buyer
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  behaviors and now we get to the first
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  set of information that is not available
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  to the general public it is buy side
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  information
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  from your own operations and by that
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  what do I mean if you're a digital
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  publisher and you're in the group that's
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  focused on making that money all of your
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  focus is likely on how can you make more
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  money from your ads you probably don't
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  even give much thought to your own
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  marketing department but in all
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  likelihood you have a Marketing Group
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  who is trying to promote your own brand
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  they may be working with agencies they
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  are running campaigns
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  they likely have information about the
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  prices that they are paying for media uh
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  in all likelihood when you reach out to
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  them you may find that at first the
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  information that they can give you is
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  not that useful or they may say that
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  their spend is going towards one major
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  source say Facebook or Amazon or maybe
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  they are running mostly on TV and have
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  limited digital spend however don't give
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  up in all likelihood they could redeploy
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  some of their campaigns in such a way as
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  to provide you more useful information
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  for example running Innovation or test
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  budgets in areas that you're interested
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  in learning some of the Dynamics
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  about with this source of information in
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  particular I would caution you to get
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  advice from your own internal legal
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  department to ensure that you're
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  operating in consistent manner with your
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  own practice
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  and how your partners expect you to
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  engage with them some companies have
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  concerns about using buying behavior for
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  your own benefit so check with your
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  legal department and again let's recap
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  the strengths and weaknesses the
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  strength of buying behavior from your
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  marketing department is that you're
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  using real data the weakness is that you
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  are limited by what your marketing
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  department can and will do for you let's
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  turn our attention ition to Source
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  number four this is what I'm going to
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  call anecdotal Advertiser and agency
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  feedback this is when an Advertiser or
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  an agency tells you or likely someone in
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  your Sales Group your prices are too
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  high we can get that same advertising
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  inventory at lower prices elsewhere in
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  many respects this is the least
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  trustworthy source that we will discuss
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  because the advertiser has has no
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  incentive to tell you if the prices are
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  too
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  low however they may still tell you that
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  they're not low enough it doesn't mean
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  that it can't be a good source of
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  information and so let's talk about how
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  to get good information out of these
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  conversations firstly in my experience
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  the agencies are going to be a more
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  reliable source of data than individual
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  advertisers this is because frankly they
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  have less incentive to lie they aren't
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  directly impacted by the price changes
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  of your media and they're going to see
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  more
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  campaigns another piece of advice is not
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  to ask the advertiser about individual
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  prices instead ask them about other
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  Dynamics associated with the campaigns
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  leading questions like it seems like we
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  used to be a bigger part of your budget
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  and now we're dropping what's going on
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  or ask them about performance marketers
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  love to talk about inventory and what's
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  performing and what's not and often they
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  will give you insights into the
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  campaigns and how you're performing
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  relative to your competition and in this
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  way you can back into the pricing
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  Dynamics the other thing that you can do
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  here is check pricing structure rather
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  than absolute levels and by that what I
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  mean is you may be able to get feedback
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  from an Advertiser who says things like
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  by the way did you guys know that you're
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  the only ones in the industry who are
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  charging based on cost of media
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  everybody else is charging on a CPM
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  basis getting feedback like that can be
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  absolutely gold so before I summarize
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  please go ahead and hit the Subscribe
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  button so you can get updates as I bring
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  out new content now let's look at the uh
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  strengths and weaknesses of each of the
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  four different groups again the
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  measurement companies strong where it's
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  a reliable and consistent form of data
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  often they have systematic biases that
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  the user isn't aware of the company
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  earnings strength is that it's actual
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  performance data the weakness is it only
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  comes out every 3 months and not all
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  companies have to report and when they
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  do it may be only at an aggregate level
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  in terms of buying behavior from your
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  own marketing team the strength is again
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  you're looking at real data not
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  estimates the weaknesses that it's
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  limited by what your marketing
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  department can do for you and then
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  finally the advertising agency feedback
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  as we discussed potentially the least
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  trustworthy uh CU it's going to be
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  biased in One Direction but it has a
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  strength you're getting that feedback
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  directly from the customer so in in the
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  end of the day you're going to have to
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  use all four of these sources uh to
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  varying degrees and you have to use your
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  judgment as to how I hope this content
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  has been useful as you're thinking about
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  how to constantly monitor the pricing
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  changes in the industry over time thanks