Most publishers know exactly how much digital revenue they generate. Far fewer know how much profit they actually keep. Hidden fulfillment costs, software fees, wholesale markups and operational inefficiencies can quietly drain margins without anyone noticing. Following E&P’s recent webinar with Rambunctious Rhino founder Zack Watson, publishers are taking a closer look at the economics behind their digital advertising operations—starting with a free Total Media & Margin Savings Calculator designed to help uncover where profits may be leaking.
Revenue doesn’t always equal profit
Digital advertising has become an essential revenue stream for local media companies. Publishers have expanded beyond traditional display advertising into search, social media, programmatic advertising, connected TV, streaming audio and an ever-growing list of digital marketing services.
Sales teams are bringing in business. Advertisers are renewing campaigns. Digital revenue continues to grow. But according to Watson, that success can mask a much different story once campaigns move into fulfillment. “Your margin problem, if you have one, is usually a structure problem. It’s not a sales problem,” Watson said during the webinar. “That’s things from high-cost reporting to CPM-based pricing and hidden markups that work against you.”
Rather than assuming weak profitability starts with sales, Watson encourages publishers to examine everything that happens after the contract is signed.
Finding the hidden costs
One of the biggest challenges, Watson said, is that many organizations simply don’t have complete visibility into where their money goes. “What organizations often don’t realize is that we’re overpaying due to a litany of things,” he explained. “It’s the arbitrage loss in paying wholesale CPMs for programmatic. It’s different platform fees, software fees for reporting, software fees for CRMs, whatever it may be.”
Those expenses often accumulate gradually. Individually they may appear manageable, but together they can significantly reduce the profitability of an otherwise successful digital sales operation. Programmatic advertising is one example Watson highlighted. Depending on how fulfillment is structured, publishers may unknowingly pay wholesale rates that include substantial markups before campaigns are ever delivered.
Reporting is another often-overlooked expense. Beyond software subscriptions, many organizations dedicate valuable employee time to maintaining dashboards, connecting APIs and producing client reports. “Reports and dashboards don’t run themselves,” Watson said. “They expect the local media companies to have folks who own that, making sure everything’s set up, connecting all the different APIs, creating the dashboards for every single client.”
A tool designed to ask the right questions
To help publishers better understand those costs, Rambunctious Rhino developed its free Total Media & Margin Savings Calculator.
Rather than replacing a full operational review, the calculator provides an opportunity for publishers to estimate where hidden expenses may exist and identify areas worthy of a closer look. It encourages management teams to ask practical questions:
Watson believes those conversations alone can reveal opportunities many organizations haven’t previously considered.
Looking beyond fulfillment models
The calculator also encourages publishers to evaluate how campaigns are fulfilled.
Some organizations operate entirely in-house. Others outsource campaign execution through wholesale providers, while many have adopted hybrid approaches. According to Watson, there is no single model that’s right for every publisher. The important thing is understanding the real cost of whichever approach an organization chooses. “The fully loaded math is tough,” he said. “You can’t just hire a search person. You can’t just hire a social person. You can’t just hire somebody to do all the tag management and all the analytics.”
As publishers continue adding services across connected TV, streaming audio and emerging digital platforms, operational complexity only increases—making a clear understanding of fulfillment economics even more important.
Explore the recent E&P Webinar
Transparency matters
Throughout the webinar, Watson repeatedly returned to one theme: transparency.
Publishers should understand not only what they charge advertisers, but also what they pay to deliver campaigns, how vendors structure pricing and where every dollar goes after the sale. “Can you show me every placement?” Watson asked. “Most people won’t show you every placement. They’ll show you some of them. They won’t show you all the stuff at the bottom.”
That level of visibility, he argues, allows publishers to make informed decisions rather than relying on assumptions about profitability.
Start with the numbers
For publishers who want a better understanding of their digital advertising economics, Watson recommends beginning with the Savings Calculator.
Organizations that uncover potential opportunities can then pursue a deeper review of their fulfillment operations, pricing structure and workflow. The goal isn’t necessarily to sell more digital advertising—it’s to keep more of the revenue that’s already being generated.
As Watson concluded during the webinar, “Move with the market. In order to be competitive, you’ve got to be able to effectively execute across multiple platforms your clients want to be on.”
Understanding where your margins stand today may be the first step toward building a stronger digital business tomorrow.
About Rambunctious Rhino
Rambunctious Rhino is a white-label digital campaign execution partner built specifically for media companies and their sales teams. The firm helps publishers deliver sophisticated digital advertising programs under their own brand while Rambunctious Rhino manages the campaign setup, optimization and reporting behind the scenes. Led by founder Zack Watson, a media advertising veteran with more than 20 years of experience across organizations including the Los Angeles Times, Gannett, AdTaxi, The Denver Post and others, the company focuses exclusively on execution and operational support. By handling the complex fulfillment work, Rambunctious Rhino enables media companies to scale digital services, protect margins and build stronger long-term relationships with local advertisers.
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