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.
Advantages
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.
Implications
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.
