As programmatic opportunities are evolving, publishers have more and more ways to put their inventory on the market. We’ve looked into Preferred deals and Programmatic Guaranteed already and in this article, we’ll dive into Private Marketplace deals.
What is a Private Marketplace?
Private Marketplaces are also known as PMPs, closed or invitation-only auctions, and private auctions. The concept is that a publisher, or a few of them, invite advertisers/demand partners to an exclusive real-time auction for their premium inventory. Publishers often package their inventory based on various audience and impression attributes, content type, etc., thus making it more attractive to buyers. PMPs are more transparent and safe than traditional open auctions as publishers are fully aware of who will be bidding and are upfront about the price they expect by setting respective floors. Advertisers, on the other hand, have the advantage to know exactly where their creatives will appear.
How do they work?
Private Marketplaces combine the best of traditional direct deals and programmatic. Typically, PMPs involve a direct relationship with buyers, exclusive premium inventory that is only available at the specific private marketplace, transparency of the deal, as well as the efficiency of programmatic automation of the sales process, and the potential to optimize and target distinct audiences in real-time.
All details of the deal are negotiated in advance between the publisher and the buyers, including price floors and type of inventory. To set up a PMP deal, the publisher’s inventory is directly plugged into the advertiser DSP (demand-side platform). The use of Deal ID is obligatory, as it is the “key” to the deal, it identifies the buyer and seller of the specific inventory and contains information about the prenegotiated terms, which makes the programmatic execution of the deal possible. Once an impression is available, it is auctioned in real-time among the invited buyers, the highest bid wins and the corresponding ad is served.
Advantages of PMPs
Transparency
Private Marketplace deals are intrinsically transparent as the buyer and the seller negotiate the main terms beforehand and they both know exactly who they are dealing with thanks to the Deal ID.
Profitability
PMPs deal with premium inventory, which is characterized by higher CPM rates. The publishers package their inventory to make it attractive to buyers based on certain attributes, such as audience characteristics, high viewability, and user engagement. Advertisers are willing to pay more for ad placements that match their requirements.
Safety
As both parties of the deal are known, PMPs come with much lower chances of ad fraud. The risk of data breaches is minimized due to eliminating the need for mediators and thus reducing the points where system weaknesses can be exploited.
Relationship building
As the terms of the PMP deal need to be negotiated beforehand between the publisher and the selected advertisers, this creates an opportunity for relationship building between the parties, learning about each other’s priorities and requirements, and setting the ground for future endeavors.
Disadvantages of PMPs
Labor-intensive
PMPs are not fully automated and require some manual work to get them going. This means that they take more time and effort to set up than open auctions.
Missed opportunities
As Private Marketplaces are invite-only, publishers may miss interested advertisers due to lack of information. This can result in lower rates than possible, however, this risk depends on your research and negotiation skills.
How do PMP deals differ from Preferred deals?
The terms can often be confused as in both Private Marketplace and Preferred deals the publisher selects the advertisers/buyers for the deal, but the impression volumes are not guaranteed (as is with Programmatic Guaranteed). However, with Preferred deals, the negotiations end up with a fixed price, whereas with PMPs there will be an agreed-upon minimum price (floor) and a real-time auction afterward. Preferred deals also have a higher priority in the ad server than PMPs.
Wrap up
Private Marketplace deals are a type of programmatic direct deal, along with Preferred deals and Programmatic Guaranteed. PMPs let publishers sell their premium inventory to buyers of their choice. Usually, the inventory is packaged based on audience and impression attributes, to make it more appealing to advertisers. It is an invitation-only auction with pre-agreed price floors and inventory type that creates opportunities for stronger seller-buyer relationships, greater transparency, and higher revenue potential for publishers.