Where did the money go? Guardian buys its own ad inventory

Robert Brill, Founder and CEO, BrillMedia.co on 10 Jan 2017
“Paul - we buy media using a number of programmatic solutions. You get different points of transparency depending on where you sit in the supply chain. Large enterprise advertisers can negotiate contracts with their agencies to get line item budget transparency. Many do not. One-off ad buyers can negotiate transparency for their media buys through a programmatic ad buying partner, though many don't. Agencies who buy through programmatic channels get transparency down to the cost of data providers, platform fees and peripheral technology costs and media fees. We do not get insight into costs for SSPs, order management systems and ad exchanges.”
Paul Fallon, Performance Marketer, Enquote Marketing on 5 Nov 2016
“Jim - you say in your original post that the 30% figure reflects a 'market force at work' and you imply that the margins many companies take are justified because of the value they offer. That may or may not be true, but for any market to function properly buyers need accurate, complete and transparent information on where their money is going. This is the real issue.
As a genuine question, do advertisers who buy traffic which includes data from VisualDNA in the supply chain get the exact figures on how much of their spend goes specifically to VisualDNA?”
As a genuine question, do advertisers who buy traffic which includes data from VisualDNA in the supply chain get the exact figures on how much of their spend goes specifically to VisualDNA?”
Ben, Analyst, NA on 2 Nov 2016
“Jim - you might be confusing the concept of operating margin % and net vs. gross revenue. While I agree fashion retailers would be happy with 30% margins, it's not an analogous situation to publisher receiving 30% of what their advertising client believes they're paying for ad placement. It would be similar to a retailer selling product for $100 on eBay and be having eBay's commission for that sale be $70 as opposed to the actual take rate to eBay which is < $10. For any consumer facing e-commerce seller, a 70% cut of the sales price from a vendor would obviously make the operating margin very negative.”
James, Owner, Own on 19 Oct 2016
“Actually it's a completely incomparable scenario; retailers are selling goods in a physical store and receive a large cut for making the sale, their justification being that they absorb the cost of sale. Publishers first and only role is to deliver content - be it news, entertainment, whatever. Advertising represents a revenue channel that allows brands to promote their goods to relevant audiences in contextual environments. Not the same at all.”
Ben, Head of programmatic, Witheld on 18 Oct 2016
“Fair point Jim, other than oil and retail know they are only getting 30%. They are clear where the 70% is going and what value is being provided in exchange. It's not being extracted in an opaque way whereby they have to buy their own oil to work out who else is in, and what they are taking, out the supply chain.”
Jim Hodgkins, Managing Director, VisualDNA on 7 Oct 2016
“From this example of at worst 30% share to publisher the industry has clearly moved a long way from the old days of 15% agency commission or (85% net). However the opportunities and threats in media buying such as targeting audiences, managing optimisation on positive side and well documented negative ones have also changed. Look at other value chains such as fashion or oil and i think the producers would be delighted with 30% of retail price In a world of rapidly increasing supply of digital ad inventory and difficulty in determining who you are advertising to perhaps this is a market force at work and not a shocking revelation ?”
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