Fees, Fees and More Supply Chain Fees.
for Kubient
We are hyper-focused on optimizing what has become a cluttered complex digital advertising supply chain. Causing supply-side issues with publishers having the value of their audiences diluted, and buy-side not having proper transparency and accountability when it comes to ad fraud.
If you are looking to buy ads on the web or simply allow advertising on your website, you have encountered the world of AdTech vendors. Whether the vendor is Google, Facebook or The Trade Desk, all of them charge you to use their systems to offer or purchase ads. Although they use different terms, in the end all of them charge a fee, and too often people may not know what the fee is for or if it truly is competitive. Furthermore, we don’t attempt to negotiate these fees or shop around–we just accept it and move on. Some companies even bury those fees in the contract hoping you won’t notice them–so you may never even know you paid an extra fee.
Before we get into what the fees are for, it is important to understand who is who in the AdTech space. For the most part we can divide companies into two camps: Demand Side Platforms (DSP) and Supply Side Platforms (SSP). DSP’s facilitate the buying of ad space and SSP’s facilitate the selling of ad space.
For DSP’s there are really only a few that are worth mentioning by name: MediaMath, The Trade Desk, DoubleClick, Oath, and RocketFuelThere are other smaller DSP’s that fall into niches and have truly direct brands and advertisers (Kubient for one).
The problem is these DSP’s charge a variety of costs for using their services.
DSP
Setup Fees: Probably the worst type of fee. We have seen these range from a few hundred to a few thousand dollars. We even saw one company try to charge us to fly a person out to our New York office from California to walk us through the platform. Setup fees typically include the cost of sending you an account manager or a support person to help you get going on the platform. Rarely do these setup fees satisfy the customer’s needs; they are just there to pad the budget of the platform and perhaps give commission to the salesperson. Not all the DSP’s charge this, and we found many will waive it if you just put your foot down. So always ALWAYS avoid agreeing to these and if they won’t budge try another system. If their system is too confusing for a customer to learn on their own or with a simple online walk through, then they need to fix that–you shouldn’t foot the bill for UI/UX.
Monthly Minimums: Not necessarily considered a fee, but many of these companies are clever in how they word it. They may structure it so that it sounds like as long as you spend more than that amount each month there is not another fee, and it’s only there to cover the costs for setups that don’t end up spending money. Often they will charge a monthly minimum plus all their other additional fees, and what is worse they will add language so even after you wish to terminate the contract you may still have to pay for three more months until the contract finally ends (Note: this is extremely common!), trapping you in a cycle where you either give 10k with no media buys or spend the minimum and pay the additional fees on top of that each month.
Platform Fees: This is usually a fixed rate and is applied to your spending each month, so if you bought $10,000 worth of ads and the fee was 10% you would owe a total of $11,000: $10k for the ad space you purchased and $1k for the fee. For the most part, this fee is pretty standard, although the rate can differ greatly. We have seen some as high as 40%! We feel anywhere between 10% and 30% is fair depending on how much you plan to use on the platform. It costs a lot of money to run AdTech systems so this fee provides the bulk of the revenue for them. One worrying trend that was brought to our attention was what we are calling the Office Space Scam. What some companies are doing when they bill you is add a small decimal place to the end of their fee calculation, like 10.0001% instead of just 10%. For a small balance, this doesn’t seem like much, just a penny or so. But when some of these companies have revenues in the mid-billions or higher that can come to a significant amount. They bank on you not noticing or checking it each invoice so you don’t see it add up to the larger amount. Our advice: if you ever see a fee a penny higher than what you expect, then you know that something is wrong and you should immediately alert the company and audit your dealings >>> READ MORE
