We have written before about how not all pre-bid targeting, contextual advertising, and brand safety providers are the same. Each provider’s technology and speed of processing URLs can create differences in scale. There is another problem in working with a pre-bid targeting provider that doesn’t scale, creating an issue very similar to the market dynamics seen in the competition for audience buying.
The effects of shrinking inventory in programmatic advertising
Everyone who buys media via programmatic right now can attest to the fact that the scale of impressions is dropping and the cost of the media is increasing. This is because the same advertisers are trying to reach a shrinking pool of users. As such, the competition is increasing, driving up the cost of reaching those users. The increase in cost is in the access to data, and also in the cost of media.
Now imagine that a large population of advertisers is also using a pre-bid technology provider that has proven issues with scale. In a previous article we explained a few reasons why other companies and technologies would have issues with scale, so we won’t go into that here.
But let’s also say that all of these advertisers have similar lists of target keywords (or avoidance keywords), meaning that they are all trying to reach or avoid the same context or topic. You now have competition on the same–or similar–lists of words. Competition drives increases in media cost, and the winning advertiser now ends up spending a bit more on the contextual advertising as well.
The issue becomes even more acute when you are working with a pre-bid data solution that doesn’t have enough scale.
In that case, there is a greater number of advertisers competing for similar pre-bid targeting, on a small subset of total available inventory. It’s not uncommon to see CPMs exceed $15 for standard display when targeting contextual signals and going up against competitors. When the media costs more, you become less efficient at reaching your goals.
How working with a pre-bid targeting partner can help
So how do you drive more efficiency with your pre-bid targeting?
Easy, work with a pre-bid partner that can achieve maximum scale. Processing pages that the other providers aren’t means that there will be far less competition on those pages, which will reduce media CPMs.
Other articles to read in this series:
- Why speed is important in a pre-bid targeting, contextual, or brand safety solution
- Why scale is important in a pre-bid targeting, contextual, or brand safety solution
- Why speed and scale can reduce media cost in a pre-bid targeting, contextual, or brand safety solution
- How you can achieve 50% more efficiency with pre-bid targeting, contextual, or brand safety
- Why you should continue to use a post-buy verification solution, just not for pre-bid targeting