MediaRadar Blog

2 Strategies to Help You Set the Perfect Price for Your Ad Inventory  

“Price is what you pay. Value is what you get.” 

Those are Warren Buffet’s words and what’s running through advertisers’ heads when they’re looking at your ad inventory. 

Pricing your inventory and showing its value to advertisers has never been easy, but it’s exponentially more difficult when 74% of major advertisers are walking on thin ice due to the economic downturn.

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In today’s uncertain economy, every line item is under intense scrutiny. 

Is the inventory worth the price? Can I get it cheaper from another partner? Which formats are worth splurging on? 

Then there’s the brand-safety angle. 40% of marketers expect an increase in brand safety concerns this year. 

The answers to these questions determine whether or not an advertiser will say “yay” or “nay” to your price. 

So, how can you set ad inventory prices that navigate pricing objections and gets advertisers to dig deep into their wallets? Here are two strategies. 

1. Conduct a Market Analysis

A market analysis is a comprehensive assessment of your total addressable market (TAM) and the competition, particularly in relation to ads. By conducting a market analysis, you can get a complete view of the playing field and set a fair and competitive price for your ad inventory. 

A thorough market analysis has three steps, and they all revolve around one word: understand.

To set the perfect price for your ad inventory, you must understand your audience, prospects (the advertisers), and competition.

Understand your audience

This step is all about you. It’s time to look inward and identify why an advertiser will agree to pay for your ad inventory.  

To do that, ask yourself a few questions about your audience: 

  • What demographic does your inventory attract? Does it align with your prospect’s ideal customer profile (ICP)? 
  • How do people interact with your inventory? How often do they come back? 
  • What interests does your audience have? Are there trends or commonalities? 
  • What are their consumption habits? Do they prefer mobile or desktop? What about video and social media

Once you understand your audience and why advertisers would be interested, turn your attention to them. 

Understand your prospects 

Your prospects are your advertisers. They’re who’s buying your inventory—and selling it to them relies on your ability to understand them the same way Apple and Salesforce understand their customers. 

To do that, ask yourself a few questions about your prospects: 

  • Who’s their target audience? Does your inventory align with their audience? 
  • What are they looking for in an advertising partner? Are they looking for one with competitive intelligence? How about advanced data and measurement capabilities? 
  • What do they, or should they, like about your inventory? Why would your inventory appeal to them over the competition? Does it match their ICP? Does your inventory have a history of surpassing engagement benchmarks?
  • What are their buying patterns? Is there any seasonality? Are your prospects buying ads during big sporting events, like the Super Bowl, or in the lead-up to the holiday season

At the end of this exercise, you should be able to step back and paint a clear picture of your prospect—maybe a CPG advertiser—and what they’ll need to hear to agree on your price (and for you to hit your goals). 

Understand your competition

There’s no shortage of ad inventory available. There’s also no shortage of companies going to great lengths to get advertisers to buy their inventory. That’s why setting the perfect price relies heavily on getting your eyes on your competition’s price. 

To do that, ask yourself questions about your competition: 

  • What CPMs are they charging? What’s their average CPM, and how does that compare across ad formats? 
  • Which formats do they offer? Are they offering premium formats? If so, are those formats delivering better results and, thus, worth the price? 
  • How is your inventory/offer different or better? What sets your inventory apart? Is it the audience’s engagement? How about the price? 
  • How’s your competition different? Are they offering different ad formats—or the same ones at a better price? Is their audience more engaged? 

Once you understand your audience, prospects, and competition, you can effectively set a price for your inventory that’ll light up any advertiser’s eyes.

2. Let MediaRadar Do the Heavy Lifting

A thorough market analysis conducted with blood, sweat—but hopefully no tears—is doable, but why not have MediaRadar’s CPM Insights tool do the heavy lifting?

Here’s how MediaRadar can help you set the perfect price for your inventory. 

Understand Your Prospect’s Programmatic Buying Strategy

The past and present are often good predictors of future advertising strategies. MediaRadar’s CPM Insights tool can show you the typical CPM range advertisers currently pay and how they compare to category (insurance, finance, etc.) and format (display, native, mobile, and video) averages. 

In the example below, the average CPM for advertisers at Geico was $2.12 for display ads across publisher categories such as Entertainment & Media, Sports News, and Auto. 

With insight into an advertiser’s current programmatic strategy, you can craft a pitch built around a price point that comes in less than what they’re used to paying for similar inventory. 

Buying strategy overview example

Compare CPMs Across Product Categories

Understanding what your prospect is currently spending is essential, but how does that stack up against their competition? 

With MediaRadar’s CPM Insights tool, you can instantly see how advertisers spend compared to their industry competitors. For example, how does Geico’s CPM compare to Progressive’s?  

You can also see which ad formats are going for the highest price and how CPMs are shifting, which can give you insight into seasonality and other nuggets that could strengthen your pitch.

In the example below, Geico’s average CPM is 14% more than its competitors in the insurance category. With this information, you could highlight how Geico is paying a premium for their inventory across formats and, more importantly, how you can get them the same—or better—results for less. 

Geico example

Get Ad Inventory Pricing Recommendations 

This data comes together in a dashboard with the answer you’ve been waiting for: the perfect price for your inventory. 

But not just any price—the perfect price for specific advertisers across industries and product categories.

MediaRadar gives you a deep dive into how ad pricing is shifting due to changing market conditions and recommends a CPM range for any advertiser. MediaRadar will also let you know how high you can go with your price before pricing yourself out of the deal.

There’s no guesswork. Just the perfect price to get your ad inventory flowing off the shelves.

In-depth Market Analysis vs. MediaRadar

There’s an old way and a new way for just about everything—and that’s certainly the case for pricing ad inventory. 

On the one hand, you have the manual market analysis; on the other, you have MediaRadar. 

Both get you to your destination—the perfect price for your ad inventory—but MediaRadar gets you there with fewer resources. 

That said, don’t ditch the manual process altogether. Do some legwork, take what you know about your audience, prospects, and competition, and combine that with instant intelligence from MediaRadar.

The result? The perfect price for your ad inventory.
Ready to see MediaRadar’s CPM Insights tool in action? Reach out today.