Mike Seiman of CPX Interactive has written a nice guest blog post on the Right Media Blog about the untapped opportunity of working with “Lower-Tier” ad networks and reevaluating what they can do for you.
The most well-known display ad networks have enjoyed success and having good reputations by focusing on the metric of effective CPM instead of total revenue delivered to publishers. How do they do this? They pay high rates for the impressions that they really want, and then send the rest to unpaid defaults where the publisher must then redirect to another ad network to try and get that inventory bought. This can continue in a chain until it hits a “lower-tier” ad network who has the ability to monetize any quality of inventory.
Because ad networks working on the Right Media Exchange can monetize 100% of inventory for publishers they end up paying high rates for top quality inventory but low rates for lower quality inventory ending up with a lower average effective CPM than some of the well-known ad networks who are only buying the high quality inventory and making the publishers send the inventory they don’t want elsewhere. Why should a network that’s actually delivering more total revenue for a publisher get put into a “lower tier” box when delivers more revenue? This occurs just because people focus on effective CPM as the most important metric.
Of course, if you’re using a tool like RMX Direct you can actually have the network that will pay the most for each impression buy that impression when it comes in, and we thank CPX Interactive for participating as an ad network in our product.