A few years ago, only the most sophisticated companies in the industry even knew what real-time bidding was. Now, there are demand-side platforms that cater specifically to mom and pop small businesses. With all of the clutter that our industry collectively puts out, it’s important for a company of any size to know what to look for when evaluating potential bidder platforms.
Managed service vs. self-service
Managed service means that a team of experts at the company you’ve chosen will perform the heavy lifting of the campaign setup and optimization for you. This offering is ideal for small companies that are new to RTB or organizations that simply don’t have the headcount for a team to run their own campaigns. The luxury of having someone do your dirty work for you comes with a cost, which is typically double or even triple what self-service costs.
Self-service means you’ll be setting up and running all of your campaigns yourself. This is typically the choice of more advanced online advertisers who not only want their fingers on the button, but want to save some money as well.
It’s important to note that while some platforms offer both options, each leans one way or the other. If you’re thinking “I’m not quite ready to run my own campaigns right now but I’d like to be able to eventually," pick a reputable managed service DSP that will help you solve your most immediate needs and then worry about running your own campaigns when the time comes.
The prevailing fee structure for DSPs is “cost plus,” meaning you’ll pay the cost of the media plus an additional percentage on top as a management fee. This structure works because you get full transparency into your costs and will subsequently have a much easier time managing your margins.
There are very few exceptions to cost plus pricing, but there are a few. One type is a flat, yearly licensing fee for the use of a bidding platform. This is an ideal setup for the biggest of online spenders since they no longer have a tax on their budget. If you plan on spending in the tens of millions of dollars per year on media it makes a lot of sense to pay a flat, predictable fee that won’t penalize you for increasing your advertising budget.
In the next post in this series, we’ll look at the two other major evaluation criteria to consider when choosing whom to work with.