Hybrid pricing

Hybrid pricing combines the percentage of media cost (POM) with the CPM cap. The Trade Desk uses a hybrid pricing model for third-party data segments to create a healthy and scalable data marketplace. This model benefits both data providers, who earn more when their data is used on high-value impressions, and advertisers, who can activate more data without runaway costs.

Here's what you to know about hybrid pricing:

Hybrid pricing components

The following table describes each hybrid pricing component.

Component Description
POM The percentage of media cost applied to the impression media cost. Data cost increases as media value increases.
CPM cap The fixed maximum data rate. Data cost cannot exceed this value for a given impression, regardless of media cost.

The POM determines data cost for most impressions. The CPM cap applies to premium inventory, where higher media costs would otherwise increase the POM-based cost beyond the cap.

The following image illustrates how a hybrid pricing model calculates data cost for each impression by applying a 50% POM and a $5 CPM cap, then selecting the lower value.

To further illustrate the examples from the preceding image, here's how the platform calculates each payout using the same 50% POM and $5 CPM cap:

Hybrid pricing benefits

The hybrid pricing model provides the following benefits:

Best practices

The following is a list of best practices for setting hybrid rates:

FAQs

The following is a list of frequently asked questions about hybrid pricing.

Are hybrid rates required across all data rate levels?

Yes. Hybrid rates are required for system, partner, and advertiser rate levels. For details, see Third-party data rates.

Why are rates restricted to the hybrid type?

The hybrid requirement promotes consistent, scalable pricing across the marketplace. Fixed CPM rates can price out advertisers on low-cost channels or leave revenue unrealized on premium inventory. Hybrid pricing addresses both scenarios by tying data cost to media value with a defined ceiling.