Are You Dumb Money? Use this Quick Audit to Find Out

Adam Heimlich
2 min readApr 10, 2019

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“If you’re playing poker and you look around the table and can’t tell who the sucker is, it’s you,” goes the old gamblers’ saying. A lot of companies have decided digital advertising through an agency is a sucker’s game entirely. Maybe they’re right. On the other hand, a lot of the best digital advertisers use agencies. Clearly, there’s significant variation in the media service market. It causes advertisers who aren’t in-housing to wonder: Am I the sucker?

The best way to find out is to audit the RFPs your digital team sends to the vendor marketplace on your behalf. From these, sellers of digital media determine, at a glance, what level of service you’re accustomed to — and what you’ll tolerate.

Here are four red flags. If your team is violating two or more of these, it is exceedingly unlikely that your interests are well-served as your digital advertising budgets are spent.

  • Don’t imply you can’t assess value. In traditional media, upfront costs are useful because exposures are standardized. In digital media, some exposures are measurably worthless. To ask for the cheapest upfront digital rate is to ask for tons of worthless impressions. Requesting “viewable CPM” instead of “CPM” is enough to show you’re not a mark. The smartest buyers adjust on several quality factors and negotiate renewals armed with each partner’s historical, value-adjusted costs. Unadjusted CPM is worse than irrelevant — it’s a contraindication of value.
  • Don’t ask partners to measure themselves. Digital measurement isn’t much more standardized than online exposures. Just like asking only for upfront CPMs rewards partners willing to deliver the least value, letting partners measure themselves rewards the least stringent.
  • Don’t ask media sellers to bundle 3rd-party data in their CPMs. There are thousands of ways to target audiences. If you take a few hours to learn what options are available to you and choose the one you like best, you can negotiate a price with the data provider and avoid markups. If some media partner has a better rate on the data you want — great, use it. The probability of getting the best available data rates across your plan without asking, though, is zero.
  • Align on your primary KPI. Smart digital advertisers always optimize their buys, in-flight, to improve its impact on their business goal. This intent is signaled in RFPs via a single metric, e.g. the results of a controlled brand study. A long list of KPIs conveys that partner assessment might be arbitrary. A single KPI foretells a media team applying rigor when deciding who to cut or renew.

If getting your media team to snap to attention with an RFP audit isn’t your style, a great alternative is to hire some sharp consultants to thoroughly address your entire company’s burning questions about in-housing. A cynic would say that’s like jumping into a shark tank because you’re bleeding from a piranha’s nibble, but, hey, carnivores gotta eat.

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Adam Heimlich

CEO of Chalice Custom Algorithms, an optimization platform for ad delivery.