
"...The marginal cost of buying incremental impressions is substantially less than it is with the legacy process. Overall, we think that whereas RFP-based buys might consume 10% of spending for agency fees, trading desks might consume closer to 2-5%. In the context of how large marketers make decisions, these fee differences are no small matter."
-Brian Wieser, Pivotal Research analyst, in a report this morning.
Agree that probably 10% to 20% of display budgets flow through programmatic channels, but in my experience, most of that spend is coming from third parties that go through the RFP/IO process with the agency (ad networks) and only a minority comes through actual trading desks.
the 2.5 - 5% in non-media costs to support a campaign seems low; does it factor in the media markups that the trading desks are (probably) building into their rates?
As onerous as the paper-shuffling required through the standard IO process is, delivering a campaign through programmatic channels is also labor intensive, albeit the labor is more focused on attaining media objectives. If you consider that many of these buys are executed in the framework of the legacy systems (that require IOs and actualizations) the real cost to support programmatic media increases even more.