Quit talking about price and start talking about value

Opinion

Our industry needs to start appraising media quality through the prism of value and quit using cost as the measure. The rise of principal-traded media and the debacle over MFAs show that we still have some way to go.

Over the last few weeks, I’ve been fortunate enough to spend time around some of the most enlightened brains in the adtech space — from forward-looking product minds to leading commercial operators.

In all of these conversations, two common themes have continually emerged: the market is polarising between “cheap reach” and premium, and there is a lot of room for interpretation on what “good” inventory is.

Take the made-for-advertising (MFA) conversation. There is near-universal industry agreement that these ads do not represent good-quality media investment. These are cluttered spaces, annoying content, bad for emissions and are generally accepted as not what a reputable brand wants to support.

Terrible value

But the problem isn’t actually MFA sites. It’s what you pay for it.

At a certain price point, almost every form of media can become a good deal. Are these views super-high-quality, large-screen, sound-on, high-attention? No. But would anyone have ever complained about MFA if, instead of being priced like regular display/video, it was a $0.10 CPM? Definitely not.

At a rock-bottom price, there’s actually a case that running on an MFA becomes OK. The issue isn’t MFA itself as a concept — it’s that MFA is fraudulently sold at the lower side of regular prices. The unit price for the product received represents wildly poor value for the advertiser. That’s why it needs to be avoided. It’s badly priced and so becomes terrible value.

Unfortunately, we see the divorce between price and value perception in spending decisions at the highest levels. This is demonstrated perfectly in the US Association of National Advertisers’ recent report on principal-traded media, where 79% of respondents cite reduced cost as a key benefit of engaging in a non-transparent model. At the same time, 79% also say they’re unsure if it’s in the client’s best interest and 74% anticipate a loss of quality placement.

ANA calls for contracts and auditing shakeup over principal media ‘conflicts of interest’

Cost still trumps value

Lower cost is wanted, but loss of quality is simultaneously feared. Which of those wins?

The answer is the former. We can infer from the rise of principal-traded media, and products like Performance Max gathering traction, that media cost is still grossly outweighing true media value. For this to change, our industry needs to adjust our focus. We need to start appraising media quality through the prism of value and quit using cost as the measure.

The common perception in the market is that “quality” means the best of the best — in-stream on leading publishers, sound on, connected TV and VOD, high-attention slots. But, since this inventory is typically high-cost and increasingly scarce, it’s unlikely to be your entire media mix.

It may be (read: definitely is) possible to find better dollar-for-dollar value elsewhere (credit must go to Erez Levin’s work in appraising this).

Assessing true value

To demonstrate this in simple terms: take some of our industry’s most unloved formats. For example, the interstitial. These little beauties grab attention, taking over the whole screen. They can’t be ignored, are relatively cheap and there’s plentiful inventory. Or how about some rewarded video? Gaming continues to explode and, as a user, you actually get something you want in exchange. Full screen, usually sound on, engaged viewer — but often priced low as a second-tier product.

Both of these ad types have been maligned as “interruptive”, “low quality”, “not brand suitable” and all manner of things in between. But both guarantee eyeballs, can be deployed in brand-safe places and capture attention.

Where KPIs on quality revolve around 100% share of voice, sound on and holding user attention, these are drastically underpriced. Additionally, this can’t be captured by a media mix model — such a model can evaluate your media performance historically on a “dollars in to dollars out” level, but it can’t assess whether there was more value to be had elsewhere and falls prey to attribution games.

Developing your internal framework for assessing true media value, instead of basing decisions on cost, is where competitive advantage can be found for brands in media and where market share can be won. By identifying and investing in undervalued publishers, placements and formats, you can build brand, drive results and maximise the power of your media dollar.

Media investments are your brand’s stock portfolio — if you want to find growth, seek value.

Ryan Cochrane is chief strategy officer at Good-Loop