Programmatic Direct provides publishers with an automated way to directly sell and/or negotiate their inventory. There are three types of deals within this category: Preferred Deals, Programmatic Guaranteed, and Private Auction. They each have their specifics and are used to meet various seller and/or buyer needs. In this article, we will take a closer look at Preferred Deals, their advantages, and disadvantages, as well as their differences from Programmatic Guaranteed and Private Auctions.
What is a Preferred Deal?
Preferred Deals are direct deals within which the publisher agrees to provide exclusive first-look to specific inventory in exchange for a predetermined CPM rate. The terms are negotiated via Google Ad Manager and the price is fixed, no auction takes place. The advertiser is not obligated to buy the impressions, hence the alternative name of this type of deal: “programmatic non-guaranteed”. If the advertiser decides he is not interested in the inventory, it goes to an open or a private auction. The publisher can initiate the negotiations with a single advertiser via single or multiple buyers. He can decide to seal the final deal with one or more of those buyers.
Advantages of Preferred Deals
Predictability: Publishers get to select the buyers they negotiate with and set a price for the deal they are comfortable with. In this way, they can make much more precise revenue expectations and plan accordingly.
Security: Having the option to choose the advertisers for this type of deal creates a transparent and secure environment where the risk for ad fraud is minimized.
Superior monetization: Preferred Deals often mean higher rates for the inventory for sale. Advertisers are willing to premium CPMs to secure impressions by their desired audience. Publishers, on the other hand, can negotiate the inventory with multiple buyers before sealing the deal, thus securing high revenues.
Time-consuming: The process involves time-consuming research by the publishers into potentially interested advertisers, pitching, and lengthy negotiations.
Unfilled impressions: Since this is a non-guaranteed type of deal, advertisers may decide to back out and increase the potential for blanks.
Not appropriate for small publishers: In order to raise advertisers’ interest with their pitch, or have any leverage during the negotiation process, publishers need to have substantial traffic and/or a unique audience. If you are just starting out and still building up your following, Preferred Deals may not be for you, yet.
How to set up a Preferred Deal in Google Ad Manager?
The process of setting up a Preferred Deal is the same as with Programmatic Guaranteed. Follow the steps that we have described in this article and simply choose “Preferred Deal” as the Line item type on step 6. Make sure to enter a realistic value for “Estimated quantity”, so you can later use it for campaign monitoring and troubleshooting.
Preferred Deals vs Programmatic Guaranteed
Both Preferred Deals and Programmatic Guaranteed are Programmatic Direct deals. In both cases, advertisers/buyers chosen by the publisher get exclusive access to inventory. But there are some significant differences as well. First, Preferred Deals do not entail a guarantee for buying the inventory, the advertiser can choose to back out once they get their first look. Programmatic Guaranteed, on the other hand, as the name suggests, does secure the sale. Second, with Preferred Deals, publishers can propose the inventory to multiple buyers, and then select one or more to close the deal. Programmatic Guaranteed deals are strictly one-to-one bargaining. And last, but not least, Programmatic Guaranteed has a higher priority in the ad server.
Preferred Deals vs Private Auctions
Private Auctions are another type of Programmatic Direct deal. Both Preferred Deals and Private Auctions allow publishers to invite buyers, which may cause some confusion between the methods. With Preferred Deals, however, there is no auction, no real-time bidding. The price of the inventory is agreed on with the buyers and fixed for the deal. With Private Auctions, on the other hand, there are no direct negotiations, and the winner is chosen based on price bid. Buyers don’t get a first look with private auctions and the deal has a lower priority in the ad server.
Preferred Deals offer a great way for publishers to pitch their inventory to advertisers of their choice and get a fair price for it. To be able to attract interest with these kinds of deals, however, your traffic should be significant and you should be willing to invest (or outsource) quite some time in research and pitching. Building a relationship with advertisers is often worth those efforts. If you have not yet built a significant audience following, then a partnership with an ad network that can pitch your inventory bundled together with similar websites might be better for you.