- The agency charges the marketer for digital media on a CPM or CPC basis.
- Within this cost, there are ‘hidden’ fees to cover the cost of associated technologies used in programmatic trading. The agency may significantly mark-up such fees.
- The agency may buys inventory in bulk and in advance. It then on-sells the inventory to the client at a marked-up cost. This is known as ‘Principal Based Trading’
- Buying inventory in greater bulk can make it cheaper. However, quality of inventory may be a concern.
- The marketers cannot see, nor have any right to see, how much profit the agency is making via on-sell of inventory.
- The Non Disclosed model is simpler to understand with only one price provided.
- Through a non-transparent sourcing the costs are often lower than through a Disclosed model.
- The Non-Disclosed model provides no transparency to the marketer in not just fee, but source and legitimacy.
- Cheap and poor quality inventory is often acquired under this model.
- There is no auditable by the marketer to ensure value and confirm charges are based on cost.
- There is an increased risk of AdFraud and Brand Safety with this model through the lack of sourcing transparency.
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