online marketplaces

Here's Why Private Marketplaces are Catching Advertisers' Attention

Advertisers looking for the scale and ad quality advantages of the open market will find that Private Marketplace (PMP) deals provide the best of both the worlds
Here's Why Private Marketplaces are Catching Advertisers' Attention
Image credit: Pixabay
VP, Global Programmatic Demand – Chocolate
4 min read
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The term “Private Marketplace or PMP” is getting an uptick in programmatic mobile advertising chart - and for good reasons. As the concerns rise over brand safety and ad fraud, mobile advertisers are refocusing on their programmatic strategies. They are shifting their budgets to automated technology where they are more confident that their ads will appear only on high-quality media properties.

What is Private Marketplace (PMP) and Why Buyers Should Care About It?

Buyers need to consider an automated approach if they are looking for the most cost-effective way to buy media with access to the largest audience. A Private Marketplace (PMP) transaction is a real-time bidding (RTB), invitation-only, auction environment for programmatic advertising that leverages publishers’ inventory, typically to a select number of advertisers. Unlike open auctions, PMP deals give buyers priority to inventory before it becomes available in the open marketplace by leveraging direct relationships with publishers to curate the packages to meet their exact needs.

How Does a Private Marketplace Function?

The inventory transaction is done within an auction environment. However, the terms of the deal are pre-negotiated between the buyer and seller and the terms need to be approved - so it’s less manual than traditional IOs but more manual than open exchanges.

A unique Deal ID is generated and buyers & sellers connect through their programmatic platforms using this Deal ID. Just like open RTB, buyers can define targeting and pricing criteria for their campaigns in the DSP (Demand Side Platform).

Why Dollars are Moving Faster to PMPs These Days?

eMarketer predicts that this year, programmatic guaranteed deals will reach $27.5 billion to account for 58% of all programmatic display spend in the United States. PMPs will grow 21% to reach $13.5 billion, or roughly half of all real-time bidding spend. Meanwhile, the open exchange will grow 8.9% to $12.8 billion.

The reason for this shift is – buyers’ increasing assertions that open market inventory must adhere to minimum levels of ad quality and transparency. Advertisers want more control over their audience data. Hence, they are looking for buying through transaction models where they can put some safeguards over the inventory they purchase.

What are the Key Benefits of Buying Through PMPs?

With advertisers trying to increase their ROAS and efficiency, Private Marketplaces (PMPs) seem to be the most effective approach for them as they get controls, negotiated CPMs and knowledge about inventory sources without completely omitting out the valuable programmatic technology.

First-look Inventory with the World-class Publishers

  • Buyers can access inventory before it hits the open exchanges. They not only get the priority to show their ads prior to other advertisers but also gain additional reach (access to users who might not be found across the open exchanges)

Comparatively Lower eCPMs

  • Buyers also get “premium” access to the inventory at a lower price. The eCPMs usually seen are something in between open exchange rates and IO direct rates

High-quality Media Buy

  • Buyers know exactly where their ads will appear and can prevent them from running next to the abhorrent content. Additionally, since the inventory is coming from high calibre publishers, the chances of ad fraud & invalid traffic are greatly reduced

Increased Operational Efficiency

  • Private Marketplace (PMP) transactions are regarded as a major factor for driving down the fixed cost of media as they bridge the gap between traditional direct sales model (IO based buying) and automated framework. PMPs offer superior workflow automation (faster deal setup and execution) when compared with traditional buying by significantly reducing time-consuming processes.

Key Secrets to Succeeding with PMPs

  • Ensure that your set up gives you flexibility in creating more granular PMP packages (audience, success metrics, specific supply partners, viewability or any other custom attributes)

  • Gain a thorough understanding of what the marketplace offers, where ads will appear, and the quality of each domain

  • Identify which highly viewable placements make the most sense for your strategy via a Private Marketplace campaign

  • Ensure to ask questions on the inventory – is it available at a fixed-price – reserved or unreserved?

Concluding Thoughts

Private marketplace deals are attractive because they close the space between traditional direct sales and programmatic. Advertisers looking for the scale and ad quality advantages of the open market will find that Private Marketplace (PMP) deals provide the best of both the worlds.

PMPs also add tremendous efficiencies to a sales process, the ability to target specific audiences in real-time, evaluate and optimize.

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