top of page

Ad Buyers Growing Uneasy About First-Party CPM Premiums Tacked On To Digital Ads.

As advertisers lose the cookies they have used for targeting, reliance is shifting to first-party data. But as stations look to build revenue from their websites, there is growing pushback from media buyers concerning paying a premium for that data replacement. That is reportedly even more of a factor when it comes to ads that publishers are selling directly.

Havas Executive VP of Digital Investment Holly Dunn told Digiday that one concern is buyers don’t want to spend more money on the data than they are spending on the actual media. The result is the $1.50 to $2.00 premium put on CPMs for ads sold using first-party data is under more scrutiny than ever. And Dunn says Havas has even gone so far as to set internal guidelines for what CPM they are willing to pay for digital ads.

“Where I struggle is when data starts to become like 50% or more of the actual total media spend,” Dunn told Digiday. “Or when you’re paying a premium on top and you’re not really seeing the additional value-add in terms of performance. If you’re paying a 20% premium for data and you don’t see a 20% improvement in audience quality, then it’s not worth paying.”

Media companies can sometimes get as much as a 10% CPM premium on some buys made with first-party data. It is for that reason that efforts are underway to reframe the conversation. Rather than position the data as an expense, along the lines of paying for Nielsen ratings, more website publishers are instead positioning the data as a tool that buyers can use to plan their campaigns.

One publisher tells Digiday they are also positioning the first-party data as a value-added feature of a buy, making it accessible to the advertiser if they make a commitment that is into the six figures to help offset the costs associated with creating all the custom data runs needed for each client. They believe brands will be more likely to go along with that pricing strategy since the data is “really accurate” and allows them to maximize their investment.

While that transition is attempted, for now certain advertising categories are more likely to be willing to pay the CPM premiums in order to get their hands on the first-party data. Digiday says that includes brands in ad categories like entertainment and luxury goods.

Collecting first party data on listeners has been a hot topic in the radio industry for years. Because some companies have not even collected data on people who stream their stations, it may seem like the industry is behind other media channels. The demise of third-party tracking cookies is hastening those efforts.

Sarah Foss, Chief Technology Officer at Audacy, said at the NAB Show New York in October that she views first-party data as “a journey, not a destination.” As listeners begin to trust that their experience will be better by sharing some of their personal info, they feel more comfortable sharing more of it, she said.

Some vendors are also getting into the act. Amazon Web Services (AWS) is using metadata to help broadcasters create new content from their archived broadcasts. Others are sitting on reams of information with the potential still mostly untaped. Digital radio tech licenser Xperi collects plenty of information from connected cars equipped with its DTS AutoStage hybrid radio platform. That is already helping radio stations tap into timely insights about how, when, what and where their listeners are engaging with their programming.

There is no indication yet that is helping radio stations get higher CPMs from their first-party data, but it holds promise for marketers as they look for better ROI on their audio spending.

One media buyer told Digiday that companies that put minimum buy requirements before an advertiser can access the data are setting themselves up for failure. “Data is going to be table stakes” going forward, the buyer said, adding that the publishers that have higher quality data are the ones that are going to win.

241 views0 comments


bottom of page