Exactly how much is lost at every level?
Publishers make the highest revenue when they sell direct to advertisers. Publishers own their content and do the hard work of building their audience. They reserve every right to keep a majority of every dollar an advertiser intends to spend on their site and apps.
The banner ad-tech ecosystem has several players between an advertiser and publisher. These include – Trading Desks, DSPs, Exchanges, Networks, and SSPs. Let us look at the unit economics of how $1 flows between different players:
In this ecosystem, the majority of revenue never reaches the publisher. The intermediaries keep a portion of the revenue before passing it on to the next intermediary. Though these unit economics are highly applicable to banner ads today, we want to warn publishers that this system is already trickling into native formats.
Native inventory is very premium and has the potential to make publishers high CPMs. Do not allow the intermediaries eat your lunch. In order to keep majority of every dollar going to publishers, we believe that stakeholders (sales, adops, developers) should have tools to make the process of selling native formats directly to advertisers easy at any scale.