Happy birthday! You just scored a big advertising deal for your website. Time to celebrate? Not so fast. Your $5 CPM deal nets out to $1 CPM after middlemen take their piece. How could this be true?!!!
According to Web Publishers Left With Little After Middlemen Split Ad Spoils article on AdvertisingAge:
"In a not-atypical scenario, a publisher may only receive $1 of a $5 cost-per-thousand media buy once all the middlemen have taken their tithes. Where does the rest go? According to an estimate from Tolman Geffs, co-president of investment bank Jordan Edmiston, it gets divided like this: The agency ($.75), ad network ($2), data provider ($0.75), ad exchange ($0.25) and the ad server ($0.25)."
Party's over. Everyone go home now ;-)
Seriously, this article shows off the inefficiency of the market between advertiser and publisher in the online display advertising world. It's interesting to see how the pie is split.
Is this scenario as typical as Jordan Edmiston suggests?