Proprietary programmatic technologies allows carriers to fundamentally increase the performance of the marketing budget
Using Your Marketing Budget to Buy Video Advertising
Let's review a case based on video advertising on the Russian market.
The numbers below are the statistics for the approximate yearly advertising budgets (in Russia), spent by network carriers to buy programmatic ads (this money goes to a third-party service, an agency, or their own platform).
€ 3.6 mln
€ 2.3 mln
€ 1.38 mln
€ 1.7 mln
The budget for buying programmatic ads*
How This Budget is Currently Used
When the telecom provider is connected to third party traffic sources using programmatic technologies (SSP) via intermediaries (third party DSP, advertising agencies, etc.) the purchasing process for video ads looks like this:
Video advertising network (third party market player) buys an inventory for €0.9-1.4 per 1000 views (CPM)
The advertising network sells this inventory to advertising agencies for €3.5-5.0 per CPM
The agency sells it to the customer (network carrier) for ~€7.0 (average agency margin is ~30-40%, and higher for programmatic ads)
How to Use This Budget
When connecting your own telecom provider programmatic platform (DSP) to the traffic sources (SSP), the video ads purchasing process becomes clear and efficient:
The carrier buys inventory via their own platform for €1.1 per CPM
It's 6.4 times more efficient to use the budget this way!
In other words, with a budget of €2.8M using a programmatic channel with the current situation, you get 400 million contacts, but when using your own platform, you get 2.5 billion contacts.
Type;Budget;CPM;Number of contacts;Conversion;Conversion
Current situation (via “intermediaries”);€2,777,778;€7.0;396,825,397;5%; 19,841,270
Direct connection with a proprietary platform;€2,777,778;€1.1;2,525,252,525;5%; 126,262,626
Such efficient use of the marketing budget directly increases ROI and makes the provider that uses their own platform much more competitive than other market players. It means that a provider that uses a proprietary platform contacts their clients or potential clients much more often, meaning there are many more opportunities to increase ARPU (providers may calculate these statistics using their own numbers of contact conversions to target actions).