Money & metrics · also called platform cut, commission rate, margin take
Take rate
Take rate is the percentage of money flowing through an intermediary that the intermediary keeps for itself.
Every middleman between the advertiser's payment and the arbitrageur's bank account keeps a slice. That slice, as a percentage of what passed through, is the take rate. It is the other side of revenue share: if a partner pays out 80%, its take rate is 20%.
A search arbitrage chain can stack several. The search engine keeps part of what advertisers pay. A feed provider or syndication partner keeps part of what the engine pays out. Where sub-syndication is involved there may be another layer. Each layer multiplies, so the arbitrageur's RPC can be a modest fraction of the advertiser's bid.
Take rates are negotiable and usually improve with volume and proven quality. But the headline percentage is not the whole story. A provider with a lower take rate may pay slower, deduct more for invalid traffic, offer weaker reporting, or carry more risk of losing its own upstream contract. A direct feed removes one layer of take but demands scale and compliance resources that small operators do not have.
An example
Say an advertiser pays $2.00 for a click. The search engine's take is 30%, leaving $1.40. The feed provider's take is 20% of that, leaving $1.12 for the arbitrageur. Combined, 44% of the advertiser's money was taken along the way.
Related terms
Revenue share (rev share)
Revenue share is the percentage of advertiser spending that a search engine or feed provider passes on to the publisher whose page produced the click.
Feed provider
A feed provider is a company that holds a search ad contract with Google, Microsoft or Yahoo and lets smaller publishers use it in return for a share of revenue.
Gross revenue
Gross revenue is total revenue before the costs of earning it are subtracted; where in the chain it is measured changes what the number means.
Net revenue (ex-TAC)
Net revenue is revenue left after subtracting the cost of buying the traffic that produced it, also called revenue ex-TAC.
Direct feed
A direct feed is a search ad contract held straight with Google, Microsoft or Yahoo, with no feed provider in between.
Hosted feed
A hosted feed is a search monetisation set-up where the feed provider or search engine hosts the ad-carrying pages and the publisher only sends traffic.