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How to Price Audiences When Selling Data

March 5, 2019

So, you’ve figured out you have a valuable asset in your data, and you’ve decided to start selling it? Awesome! Now comes the hard part – determining how much your data is worth.

To be clear, how to price your audiences is 100% your business decision. But because we get this question a lot, we’ve decided to try to put together some helpful tips to help you figure out where to start.

If you’ve looked around, you’ve probably seen audiences priced anywhere from $1 CPM for programmatic direct, to $50+ for data high in-demand on premium content.

How Lotame Prices Data

When you purchase an audience in Lotame’s platform, there are generally multiple sources for each audience. Every “bit” (percentage makeup) that each “segment” (node) contributes to an audience influences how you will be billed.  When that audience is ultimately used and targeted, you will pay the specific CPM that correlates to each bit.

The total segment CPMs are not additive in Lotame, so if you are combining segments that individually cost $1.00 and $1.50, you do not pay $2.50 CPM for the whole audience. The price point that you see on screen is the MOST that you would potentially pay for that audience. This is generally calculated by the number of  impressions multiplied by the % segment contribution times the CPM for each segment).

So what does all this mean? The takeaway is that as long as you price your data segments higher than the CPM seen on screen, you’ll earn revenue on that audience.  How much revenue margin?  Well that’s up to you.

When you may want to price the audience higher

There are some times that you may want to increase the CPMs you are charging for your data, beyond what you would normally charge for a segment. Some of these instances could include:

  • The audience is made up exclusively of your first-party data. (You do value you own data as higher value, right?)
  • The audience is retargeting the advertiser’s own users (if they placed pixels to capture the data in Lotame’s platform)
  • The audience is built on “enrich” (meaning the users have been to your sites or apps in the past)
  • The audience has frequency or recency applied. (Perhaps you’re looking for the power visitors from one of your inventory sources or someone in-market for a purchase, so you need the audience to be fresh.)
  • The audience is very, very, very small to exactly the target audience that the advertiser requested.
  • The audience will be served across platforms / devices

You may need to test the waters to see how high you can pitch until you find a market price for your audiences. Alternatively, some Lotame clients charge for audience targeting based on a percentage upsell from their run of network (RON) inventory, which can vary anywhere from 10-300% greater than the RON CPM.

How to price your audiences is 100% your business decision. We thought it would be helpful you if we shared some of our learnings and advice to get started.

When you may want to price the audience lower

Just as there are instances when you may want to increase the price you are charging for a segment, there are some circumstances when you might want to decrease the price you are charging for an audience. These include:

  • The audience is primarily made up of 3PD
  • The audience is built on extend (so these users have never been to your inventory in the past)
  • The audience size is scaled via lookalikes
  • The audience is very liberal and creative

Recommendations in Building Audiences to Sell

Not sure where to get started? Here are some other helpful tips to keep in mind when building the audience segments you want to sell.

  • Build your audiences as early in the process as possible. This gives your stats more time to populate.
  • Build the specific audience requested, as well as several others that are similar, to offer a matrix of scale and pricing for your advertiser to pick from.
  • Bundle audience segments into your holistic plan for an advertiser. You can also consider bundling in your own “productized” versions of Lotame Insights, Audience Optimizer, or Cross-Device at this point in time too for even greater ROI.
  • Most importantly, be consultative. You know your data best, so working with your clients is a time for you to be the expert to the advertiser.

Have questions? The Lotame data team is available to consult and strategize with you on how to sell your data. We offer two avenues for data owners to sell data directly, either via 3rd party as part of the Lotame Data Exchange or via Lotame Syndicate (2nd party data). Contact us to learn how you can get started.

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