In response to last week’s column, astute agency-based writer Brian Hadley observed that CPA deals force a different kind of working relationship between agency and site publisher:
- You mentioned that one of the key elements in managing a CPA is to be able to optimize the click-through. Sometimes that is the answer, but when working on CPA, the publisher needs to be optimizing beyond the click. Optimization from the acquisition/lead is the only true way to improve efficiency and ROI. The publisher needs to make sure that the agency/advertiser is sharing this information with them to ensure they are doing everything they can to maximize their inventory. As someone who deals in CPA campaigns frequently, I can say that the agency and the publisher are on the same team. The goal: Generate acquisitions/leads for the client. Sharing of information can be the most important way to sustain and extend a campaign for the long term. [The absence of] …this type of communication will eventually lead to one side (usually the publisher) losing out. Additionally, the agency/client will feel the effect of this down the road, as publishers will become even less likely to negotiate on this revenue model.”
We couldn’t have said it better ourselves, Brian! And we couldn’t agree more.
Unfortunately, it has not been our experience that most ad buyers are willing to openly share information about performance beyond the click, which is the only data point that most sites know regarding ad performance without being filled in by the advertiser. The negotiation posture between some buyers and sellers has gotten so mistrustful and secretive that participants are unwilling to share behind-the-scenes information, which makes it impossible for the site to optimize for any but the most surface-level results.
We believe that our correspondent from the front lines predicts the future all too accurately: Publishers will lose if they don’t get the information they need to perform better, and advertisers will lose in the long run if publishers find they can’t make money with CPA models (because they can’t get the data they need to proactively deliver what their customers want).
Many publishers that we know resist all CPA pricing. And who can blame them? Working without complete information, they are forced to be strictly reactive to the advertisers’ demands, and no seller can run an effective business that way. Some of those sites will go out of business, other — stronger — sites will return to pure CPM pricing, and advertisers will find themselves with fewer inventory choices and less bargaining power. It won’t happen right away but will soon if we don’t create an advertising marketplace that values all the parties in the negotiation.
Sellers, your best position for long-term success is to partner with your buyers and prospects, to understand their real marketing goals, and to do everything in your power to ensure those goals are met.
Buyers, the same holds for you. Though your position in today’s negotiation may have more clout if you keep deliverables and success metrics close to the vest, over time it will be more and more difficult to get sellers to work with you if they can’t expect cooperation from you.
How all of this shakes out will be very interesting to watch.
Programmatic is taking over the digital advertising world, and at an even faster rate than expected, according to eMarketer, which raised its forecast for programmatic ad spending in the U.S. on the back of growth in mobile and video programmatic buys.
Election 2016 is already like no presidential race before it, and one of the most striking aspects of this year’s race is the disparity ... read more
Video consumption keeps increasing and Facebook is serious about a video-first world, encouraging us all to explore its full potential. Ian Crocombe, ... read more
Mike Andrews Ph.D is Chief Scientist (Forensiq) at Impact Radius, and is carrying out some fascinating work around digital marketing and ad ... read more