BUILD & PRICE NEW AD FORMATS
Finding the margin sweet spot on new offerings
Challenge
After 5 years of steady growth, a middle-size DSP has seen revenue stagnating over the past 12 months. This DSP has historically focused on display and OLV to a lower extent. Revenue and Strategy areas within the DSP are under pressure given internal forecasts estimate that under the current product and GTM set up; the growth opportunity is limited. While the board is open to invest in order to transform and grow the business, there’s a need to build a business case, assess market demand, and uncover the viable opportunities by enabling new ad formats.
Solution
Guideline’s Spend data shows that within the programmatic landscape, there is indeed a substantial deceleration of display digital media - growing only 12% in the last 24 months. While video spend nearly tripled in the same period, OLV is pacing well behind OTT; a trend that competitors are capitalizing on. The DSP also finds that digital audio is actually the ad type growing the most within programmatic, a segment that had been completely obviated by the business. Similar trends emerge when it comes to CPMs along with audio and OTT showing the largest potential to increase margins over the coming years.
Success
The Revenue and Strategy teams at DSP are using Guideline’s data to build a case for shifting from Display to OLV, enabling savings and budget reallocation to OTT and audio programmatic capabilities over 18 months. This involves sourcing inventory partners, developing new SSPs and Exchange relationships, and upgrading technology to support new ad formats. The data also helps create an immediate GTM plan, identifying demand across verticals and optimal pricing for new product launches.
The Digital Video market has show huge strength over the past five years, with 5-year CAGR at +15% and +30% in OLV and OTT, respectively.
Guideline’s customer, however, notices that Digital Audio growth is largely outpacing that of Video, with the market growing nearly 12x over the course of 5 years.
A substantially flatter trajectory, of 2% 5-Year CAGR in the Display market.
The company leverages Guideline’s CPM pricing data, looking at all key publishers in the competitive space, as they craft the pricing structure of their new Digital Audio offering.
Lastly, Guideline’s customer looks at growth rates in by product category (up to 87 reported) across the media types they are invested in.
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