There is a misconception that if you spend newswires, you receive 100% of their placement inventory. This is not the case. For e.g each content comes with its own set of objectives and a need for specific placement. For instance, some content may focus to appear on mobile, and others on a certain type of website(s). Depending on your client’s content objectives, it’s very likely newwires will use more than a single DSP (Demand-side platform) as a result. This means that for each content, you still need to compete for the share of the budget with other DSPs. Therefore, newswires focused on convincing the client that their distribution is optimal for reaching their campaign objectives.
In the case of Adtech companies like ours, the way we run our business is different. Each campaign comes with its own set of budget and a need for a specific audience segment. For instance, some campaigns will be focused on Dad's who likes the avengers movies located in Toronto Canada, and other campaigns will be focus on a different set of demographics and targeted at people with other behavioural habits. We use more than a single channel to distribute to different audience segments. That means for each campaign, we will know exactly what that specific audience segments think of your content and company.
Here is the interesting part.
With most current newswires, there is a fixed transparent fee to distribute content on their platform and as such, no incentive for the newswire to invest into performance. With the fixed fee, the client takes on the full risk of their marketing investment and the alignment between the client’s interests and the newswire is missing. You could even argue that newswires and similar platform providers are currently disincentivized to drive maximum performance as the better the advertising dollars work for a client, the less dollars they would spend on another campaign to achieve their goals.
Enter the aligning incentives model
The solution is to have a managed service that incentivise us, technology provider, to maximise the performance delivered on behalf of our client. The management fee is paid part in shares and another part in cash, and whereby the technology provider will also commit to buying more shares on-the-market.
We as an Adtech company, the companies that we work with will win together with us by signing up to an offering that facilitates alignment on both incentive and minimise spending more in added compensation, where we, the Adtech company, earn a share of the value that we help to generate. This is our company's business model, and we are setting ourselves up for success in the ever-changing adtech landscape.
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