I'm setting here crunching numbers and I've got some serious concerns about Roku and the math for their Ad system.
I use a 3rd party ad service so Roku takes 30% of my inventory off the top, then back-fills any available inventory at a 60/40 split.
The issue I'm having relates to the 30% that they take off the top. I generally have an inventory of 6,000 impressions per day. If Roku takes 30% that's 1,800 impressions per day. If my 3rd party ad provider only provides 600 impressions, I've served 2400 ads but I'm only being paid for the 600 and see nothing of the 1800 that Roku takes.
After doing the math for Q3 and Q4 I made around 0.005 cents per impression and my costs are around 0.006 cents per impression. In short, I'm losing money because Roku takes 1800 without paying me a dime.
Can someone from RokuCo (or one of the other forum members) explain how this math works? Am I wrong? At this point I'm ready to go back to the subscription only model.
First things first, i am a software engineer and cannot speak for the "ad powers that be" inside Roku. Contact through official routes for official statements.
This said, my personal musing follows. Sorry, but i don't understand what the issue is?
You had 6000 ad opportunities/say, of which
- 1800 (30%) went as Roku's share under "inventory split"
- 4200 (70%) were yours to collect (at 100%, if you had own inventory), of which
- 600 got filled by another provider (so they skimmed their angel's share)
- 3600 remnant opportunities for Roku to backfill, of which
- Roku actually filled X = ???, at 60% to you
- the rest (3600-X) were lost opportunities
i think the mistake you are making is of calculating CPM not "per impression" but as "per opportunity". "Impression" is when a viewer actually
sees an ad video (3 seconds or more it, something like that), it is not "i had an ad break marked here, therefore it was impressed". quoting the numbers you got as "per impression" is incorrect.
you hinted your expenses "made 0.005 cents per impression and my costs are around 0.006 cents per impression". i am going on a limb here to assume you meant your expenses were $0.006/opportunity x 6000/day = $36/day - and that you got paid $30/day. But if you try to calculate that as impression CPM, it will be (let's make a wild-ass guess, since i need a number - that Roku filled 1200 of the remnant 3600) $30/(600+1200) x 1000 = $17 CPM. If you received blended 60% of what advertisers paid for these particular ads, then that inventory had sold for $17/.6 = $28 CPM
i think the real focus and concern should be why your 3rd party advertiser filled only 14% of your opportunities? picture would be much brighter if they filled 50% - 80% ...