Buying Direct Inventory Increases Win Rates, Impressions & Clicks Per Dollar Spent
The programmatic ecosystem is rife with duplication and redundancy, resulting in operational and financial inefficiencies for both the buy and sell-sides. In fact, many articles have been written searching for “the lost 15%” of programmatic spend that often seems unaccounted for. We went searching for that delta and revealed compelling insights.
At TripleLift, we believe that following the most direct path to an impression yields the greatest benefit to both marketers and publishers. In order to test this theory, we conducted an A/B test to measure performance across different buying channels – one direct, and one through an intermediary exchange – to demonstrate the quantitative impact of removing intermediaries from the supply chain.
This analysis evaluated the same campaigns, launched by the same brands, bidding on the same publisher inventory, with the same bidding strategies, on the same DSP. The only difference between path A vs. B was the inclusion of an intermediary exchange, adding a hop to the transaction, and taking a nominal fee (5-10%). In this case, the intermediary exchange was reselling the same publisher inventory available in the original exchange. Our test looked at over $680,000 in live media spend, representing 385M impressions that ran over a 30-day time period.
Buying inventory directly – with no intermediary exchanges or resellers – improves your campaign performance, auction performance, and bottom line.
The test yielded significant differences in performance across path A vs. B, and a variety of key programmatic metrics:
- Win rates are 3.8x higher when buying directly (vs. through an intermediary exchange). In a competitive ecosystem dominated by header bidding, downstream win rate is directly linked to improving a marketer’s access to premium inventory and ability to deliver a campaign.
- CPMs: Clearing CPMs are 28% lower when buying directly. Removing a financial intermediary from the transaction allows lower bids to win more often in auction.
- CPC: Cost-per-click (CPC) is 220% lower when buying directly. This metric is a direct function of media cost, which was lower on average via the direct path.
- Auction performance: Bids beat competitor’s bids 40% more often when buying directly. Outbidding competitive bids from other DSPs improves a marketer’s access to the most highly coveted inventory and users.
What It Means for Buyers
At the end of the day, being an effective buyer of media means two things: having transparency into the inventory and maximizing performance. Checking sellers.json and ads.txt files helps with the former and this test shows that performance is optimized through the most direct paths to inventory. Taking a sample $100k media budget, buying programmatic media directly – without the presence of resellers – directly delivers 14m more impressions on 2.2b fewer bids, leading to more clicks and other performance KPIs.
For more information on directness and this study in particular, reach out to us….directly.