September 17, 2019 Dan Wilson

Pricing and Privacy

I’ve had a couple of days being back from DMEXCO now and the one thing that I have pondering the most is the impact of privacy on media pricing. Most readers will be familiar with the recent moves by Apple on Intelligent Tracking Prevention (ITP) in their Safari browser making it harder for cookies to be used as a currency. Firefox have done similar (albeit smaller market share) and it is inevitable that Chrome do the same. If anyone doubts Apple’s intentions, I recommend digging into the blog post they put out on IDFAs last week.

Some of these moves by the browser companies are in legitimate responses to the global privacy push that is arguably long-overdue. Some of these moves are about protecting an ecosystem. However, I want to spend a couple of minutes looking at prices.

The stat that’s been repeated that CPMs have dropped 40% in browsers where cookies are not present. So far it seems anecdotal and no one seems to be volunteering any data. From our former roles, LMX are very familiar with the volatility seen in the RTB ad exchanges so we are not surprised by this price fluctuation.

The 40% stat also got me thinking – given how publishers manage their open market floor prices nowadays (like hawks), I do wonder what happened – if they dropped the floors in response to declining fill in first price auctions, or whether this 40% was the SSP spread on bids and clearing price.

The interesting thing is if it happens across an entire industry and what this means for media companies. LMX is an entirely contextual market and we enable direct trades between buyer and seller in advance, so we are outside of this fray. But the trend is clear – if the price halves in digital in the spot market it has to have an impact on publishers direct sales and forward sales via markets like LMX become even more important for buyers to secure the scarce inventory with publisher data attached to it (as why would a publisher ever expose this now in a programmatic market where their yields have halved).

So many questions, but one thing is clear – programmatic is yet again delivering unclear benefits to buyers and sellers.


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