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How to Price Audiences When Selling Data

July 18, 2016

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.

When you purchase an audience in Lotame, every “bit” (percentage makeup) that each “segment” (Node) contributes to that audience equates to how you will be billed.  When that audience is ultimately targeted, you will pay the specific CPM that correlates to each bit.  The segment CPMs are not additive in Lotame (i.e., not $1.00 + $1.50 = $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 (i.e., n impressions * % segment contribution * CPM for each segment).  The takeaway is that as long as you price 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:

  • Audience is exclusively your 1PD (you do value you own data as higher value, right)?
  • Audience is retargeting the advertiser’s own users (if they placed pixels to capture the data in Lotame)
  • Audience is built on Enrich (the users have been to your inventory in the past)
  • 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)
  • Audience is very, very, very small (honed in to exactly the target audience that the advertiser requested)
  • Audience will be served across platforms / devices
  • Test the waters to see how high you can pitch until you find a market price for your audiences
  • Also, some Lotame clients charge for audience targeting based on a % upsell from RON (run of network), that is anywhere from 10-300% greater than the RON CPM

When you may want to price the audience lower:

  • Audience is primarily made up of 3PD
  • Audience is built on Extend (the filter has been removed that the users have been to your inventory in the past)
  • Audience size is scaled via lookalikes (use the APR to find high affinity/high index segments to add to scale)
  • Audience is very liberal and creative
  • Don’t ever give anything away for free — it will never hold value to an advertiser!
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.
Price Audience Graph

Recommendations in audience building:

  • Build your audiences as early in the process as possible (gives your stats more time to populate)
  • Build the audience requested as well as several suggested, to offer a matrix of scale and pricing for your advertiser to pick from
  • Bundle audience in to your holistic plan for an advertiser (think about bundling in your own “productized” versions of Lotame Insights, Optimizer, Cross-Device at this point in time too for even greater ROI)
  • Be consultative — be the expert to the advertiser!