Now that someone has already established that a business that considers itself to be immune to advertising, would soon enough be immune to business. That said, the fact that advertising has become more of a necessity than just a strategy has affected the advertising sector the most, making it widespread and prevalent. Not just that, its reach has expanded over the years and so has its effects. That said, a number of new ideas and strategies have been integrated in the advertising sector, one of those being ad exchange.
The Benefits of Programmatic Advertising: Publisher Side
It is the publishers who are majorly benefitted from programmatic advertising as the revenue returns are much higher when compared to traditional display banners on websites which are converting for the advertisers. Also, the quality of the content is rewarded since only the ROI is higher for advertisers on brand sites which attracts the cream. Today, almost all adtech companies are adapting to programmatic advertising since this is going to be the future of online advertising and the one who have the most robust technology would essentially win the game.
The Benefits of Programmatic Advertising: Advertiser Side
Advertisers are equally benefited with programmatic technologies if not more. Although programmatic advertising gives lesser control in the hands of the advertisers, it makes the process more simplified using machine learning and promises a higher ROI. Brands have been able to notice a higher ROI and better results with programmatic advertising. This has not only convinced the top companies to adapt to programmatic advertising but also made them feel the urgency of shifting their advertising technology in-house. Once they build their own programmatic technologies, it would give them better control and shall reduce the overall online marketing costs.
Over the years, online advertising technologies will become open source and essentially there will be an open market model. It is primarily because there’s a lot of scope in the online advertising segment and companies will continue to contribute to keep the system open and minimize dominance.
Programmatic Ads CPM Rates
With the insertion of a number of players both in the demand and supply side, the programmatic revenues which are received by the publishers is almost half and sometimes much lower than what the advertisers are spending. If you’ve three to four intermediaries who are taking a revenue cut of 20% each (Trading desk, Exchange, SSP), the publisher ends up receiving only 40% of the advertiser spend. It’s a common phenomena where the publisher gets close to 30% of the advertiser’s original bids. Thanks to the adtech ecosystem that the intermediaries are able to make so much at the cost of the advertiser and publisher. However, this gap will eventually reduce and they technologies like private marketplaces are becoming more common. The programmatic cpm rates are around $3 and above for tier one traffic. However, these greatly depends on the niche of the website as well. Insurance and finance niche can get you CPMs has high as $5 to $8 on converting traffic. On an average, the programmatic rates are almost 50% higher than the traditional banner rates and implementing a header bidding solution can have better yield on the same. If you’re looking for higher revenue from programmatic ad revenue, they you need to setup your own bidder and work with a number of technology partners for higher returns.
It needs to be noted that it is difficult to predict the programmatic CPMs for websites as the performance can vary immensely and depends on the nature of the content.
How to Increase Programmatic CPM Rates?
Increasing programmatic CPM rates for your content might be a challenge if the inventory is bought at network level. This means that a lot of ad networks and exchanges are buying your traffic simultaneously, and each exchange has its own buying algorithms! Thus it becomes extremely difficult for publishers to increase the programmatic cpms. However, the following still seems to work–
- Ensure high page loading speed
- Higher visibility or ads and monitor ad zones for viewability
- Optimized number of ad slots
- Auto refreshing ad units and higher competition using DFP
- Enabling exchange bidding and DFP First look
- Implement header bidding solution for better revenue potential
- Optimizing in-content keywords for higher bid rates
Will Programmatic CPM Rates Increase in the Future?
Programmatic is still at a very early stage and the ecosystem is slowly emerging. The combination of programmatic+native is certainly going to make additional opportunities for both publishers and advertisers. Ad networks and technology companies can continue to bank on their technological investments as the market continue to get matured. Obviously, the early adaptations are going to be difficult, but the market opportunities are certainly rewarding for the early ones. In the coming posts, we will take a deeper dive into the programmatic channels and networks which publishers can use to increase their revenue. Here, we have made a list of the best programmatic ad exchanges which you can take a look. We hope this article on programmatic CPM rates was helpful to you.