The High Cost Of Low CPMs

01/17/18

The Sell Sider” is a column written for the sell side of the digital media community.

Today’s column is written by David Kohl, president and CEO at TrustX.

The industry has been doing the math wrong.

For years media buyers have tolerated the waste everyone knew was part of cheap CPM media buys because, well, they were so blessedly cheap.

The back-of-envelope calculation was simple. Sure, that $5 direct private-marketplace deal offered more prestige, content affinity, targeting and perhaps more accountability. But the sheer cheap scale provided by the $1 open market buy at a fifth of the price easily made up for the ad getting in front of some (maybe most) of the wrong eyeballs.

And it was quite likely that a good number of those ads would make their way to the same viewers as the much pricier private-marketplace buy anyway. Massive waste was baked into the equation.

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