‘The next shoe to drop’: Seeking transparency, buyers want to know the fees that SSPs charge publishers
The fee that supply-side platforms charge publishers for the ads placed on their sites is an ad tech tax that both publishers and advertisers would like to keep in check. And after SSPs like the Rubicon Project eliminated the fees they charge to advertisers, getting a clearer grasp of the fees they charge to publishers is next for agencies.
Publishers have said they are willing to share these fees with ad buyers so that advertisers can have a better idea of where their programmatic money is going, and ad buyers want to know these fees to make sure they’re not overpaying on the ad tech tax. “We absolutely need to have access to that information because it changes the strategy of how we negotiate and buy,” said Oleg Korenfeld, global chief platforms officer at Wavemaker.
It’s “the next shoe to drop,” said Kolin Kleveno, svp and head of programmatic at 360i.
For ad buyers, how much money an SSP’s fee shaves off a bid price can mean the difference between winning the impression and losing it because the fee is subtracted before the impression is awarded. The fees can vary from SSP to SSP and even from publisher to publisher with the same SSP, but they generally range from 10 percent to 20 percent of the bid price, according to ad buyers and publishers.
Knowing SSPs’ fees can help advertisers who are increasingly scrutinizing the programmatic supply chain in order to identify cost inefficiencies, a practice referred to as “supply path optimization” and that goes beyond nickel-and-diming down the ad tech intermediaries. “Supply path optimization isn’t about finding out which SSP has the lowest fee. It’s determining the most effective supply and impression,” said Liane Nadeau, vp and director of programmatic at Digitas.
Evaluating supply-side effectiveness often can come down to price. Many publishers sell their inventory through multiple SSPs, and header bidding — which flattens programmatic auctions so that those various SSPs don’t have to wait in turn to compete for an advertiser’s bid — has commodified SSPs to the point that ad buyers would like to see publishers work with fewer SSPs in order to pressure those SSPs to make sure they are bringing something to the table other than the same inventory as everyone else.
“If there’s inventory parity between [Google’s ad exchange] and Rubicon, for example, and it comes down to there’s a different fee, why wouldn’t we on the buy side choose the cheaper path? It makes more sense for our clients,” said Kleveno.
However, complications arise when it comes to collecting and then implementing publishers’ SSP fees into a programmatic buy.
Gaining access to a publisher’s various SSP fees can be as simple as a publisher emailing a list to an advertiser. But advertisers can buy ads from thousands or more publishers programmatically. “To have to go out and create a relationship with every single publisher to gather that pricing would be quite time-intensive,” said Kyle Krueger, svp of media planning at Engine.
Even if an advertiser were to collect the SSP fees from every single publisher, implementing those fees into a programmatic buy becomes a whole other undertaking. Since SSP fees can vary by publisher and even by impression, ad buyers cannot factor SSP fees into their real-time bid requests at scale “until the fee actually starts getting passed with the bid request,” said Nadeau.
Attaching an SSP fee to a bid request may not be such a far-off dream. The Interactive Advertising Bureau’s ads.cert initiative, which is meant to root out fraud by validating the programmatic chain of custody and is currently in beta, enables companies across the programmatic supply chain to pass authenticated information with a bid request. Publishers’ SSP fees could be added to the information transferred through ads.cert as part of the initiative’s purpose to bring more transparency to the programmatic supply chain. “That’s kind of the promise of ads.cert,” said Nadeau.
More in Marketing
With the success of last weekend’s Six Invitational competition, video game publisher Ubisoft may have finally cracked the code to make esports a genuinely profitable venture for all involved.
It’s been a debate for years: How can performance and brand marketing co-exist to push sales and boost brand awareness or affinity simultaneously? It’s a question that Orangetheory Fitness is now asking itself after 14 years in business.
Blast’s expansion is an encouraging sign for the broader competitive gaming industry, particularly given the ongoing “esports winter.”