Inside the Hidden Costs of Programmatic

Agencies, for example, require more expensive people to work more often on smaller buys. Five full-time employees are needed to spend a $100 million national broadcast budget, one media agency executive said, while the same number would be needed for a $5 million programmatic buy. Those programmatic employees garner salaries 50% to 100% higher than their broadcast colleagues, and the high demand for their skills enables them to increase their pay by frequently jumping to digital-media companies or other agencies. And the machines don't necessarily eliminate simple labor tasks."It's like Excel charts and duct tape," the executive added. "If we put $100 million into TV, we need 1% commission to break even. Print and outdoor need 2% to 2.5%. On local, we need about 3%." Buying digital media directly from a publisher, without the intervention of ad tech, requires about a 5% commission."And in programmatic, we need about 10% to 12%," he said. "That's 10 times more than TV, and that's just factoring in full-time employees and overhead." Continue reading at AdAge.com Continue reading at 'Advertising Age'

[ Advertising Age | 2015-09-14 00:00:00 UTC ]
News tagged with: #digital-media companies #ad tech #5% commission

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