Supply cost explained: the media spend base DSPs pay before fees and markups
· 29m ago · Originally reported by PPC Land
PPC Land published an explainer defining supply cost as the amount a demand-side platform pays for the impressions a campaign wins, excluding technology, data and agency fees. The piece notes Amazon uses this media base when applying agency markups. It is a terminology explainer rather than breaking news.
Why it matters
Understanding supply cost helps advertisers see what portion of their budget actually buys media versus paying for fees and markups, since agency charges are calculated on top of this base.
Explain it like I’m new here
Supply cost is like the price of the ingredients before you add the chef's fee — it's what an advertiser's buying tool pays for the ad space itself.
Terms in this story
Ad inventory
Ad inventory is the total amount of advertising space a publisher has available to sell, usually counted in impressions across its ad slots, pages, apps or screens.
DSP (demand-side platform)
A DSP (demand-side platform) is software that advertisers and agencies use to buy ad impressions automatically across many exchanges and publishers, deciding which impressions to bid on and how much.
Impression
An impression is one instance of an ad being served and counted as displayed to a user; it is the basic unit that most online advertising is bought and sold by.
Campaign
A campaign is an organised set of ads with a shared goal, budget, audience and time period, run across one or more channels and measured against defined KPIs.
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