Ad rates on digital are significantly lower than on print and TV.

Businesses pay top dollar for advertising on Print and TV. However, the same isn’t the case for digital.

• Reach: In TV and Print, the DAU/MAU is assumed 100%. The same isn’t true for digital.
• Targeting: Targeting is assumed in newspaper and TV. Most digital publishers have not enforced login struggle to build First Party Data. This makes it impossible to know socio-economic and demographic information about these Anonymous Audience. Hence, businesses pay lesser ad rates if one cannot Target advertisements.
• In TV and Print, all sales is Direct-sold. However, in digital a substantial portion is Indirect-sold.
  • Bid down: In Digital, ad networks operate as bidding engines, i.e., the publisher that bids the lowest gets the Digital Advertisements. In contrast, in TV and Print, the businesses bid (up) to get space in a relatively scarce property.
  • Cut: These ad networks can take up to ~45% of the revenue.
  • Can’t monetize premiumness of platform: All businesses want to advertise on a premium Owned Identity, for example, a premium platform like The Times of India newspaper instead of an ad hoc billboard. Hence, Print and TV command premium rate. However, when advertising via ad networks, a business cannot say that it wants its advertisement to appear on a specific website. It could go to anyone who bids the lowest.