The advancements in technology over the last few years has redefined the traditional relationship between publishers and advertisers. This transformation has given rise to various models of transactional relationships between the two based on the pricing and ad inventory type. Let us explore how Private Marketplaces model of programmatic advertising is structured and understand the process flow.
Like each method has its share of pros and cons, the private marketplaces (PMP) is customized to meet a particular set of needs.
Private marketplace, explained
Private Marketplaces offers publishers the benefit of creating their own premium inventory, with defined audience available for few select buyers through an invitation-only model. With PMP, the sale happens between a single publisher or seller and selective buyers on a transparent system, since both parties are aware of who is who and where the ads are to be displayed.
Here, the exchange of premium inventory and value is conducted through an auction model, where the invitation-only mode and an identification mechanism called Deal ID (explained below) is the only difference.
What is a deal ID?
Deal ID is a specific code that is used by buyers and the publisher to identify a pre-negotiated agreement. It is like a bid request received by buyers from the publishers encouraging them to bid for available inventory with pre-negotiated terms like attributes and pricing of the inventory.
This also helps in following the campaign performance by both the publisher and the advertisers which in turn empowers them with needed control and tweak it when needed. Deal ID plays an important role in programmatic PMP where publishers give preferential treatment to selective buyers.
- Sellers know and invite specific buyers for an inventory sale. For instance, an example would be when the seller/ publisher wants to give the inventory to the buyers who are in the similar industry that could complement each other, e.g., advertising about a restaurant/catering services on a food related site.
- On private marketplaces model, buyers are allowed to see what’s available in store and seize the inventory before it gets auctioned in the public marketplaces. Because, if the inventory is not sold in private model, it will eventually hit the public marketplace.
- Programmatic methodology regulates the transaction process by waiving off manual work making it easy for parties by saving hassles of making a sale of inventory.
In buyer’s perspective
- It is like a hybrid of automated guaranteed and open auction where the component of preference for selective buyers and the transaction going through an auction.
- Buyers are assured a transparent system, with media buying control and access to the premium inventory.
- Some of the publishers want to make their inventory available only in a private auction system. This gives opportunity for buyers who want to have a stronger targeting mechanism towards the right audience.
In seller’s perspective
- Publishers have the power to demand a higher price, considering the concept of set floor pricing, as compared to inventories available in open marketplace which is defined by competitive pricing.
- Publishers have benefit of maintaining a long term relationship with buyers.
Is private marketplaces, the right one for you?
On one hand, utility of the private marketplaces model depends on specific needs of buyers when it comes to context, pricing and branding strategy; On the other hand, it’s about selling limited ad inventories at premium prices and to selective set of buyers through closed group auctions. Challenges for the advertisers lie in getting onto the list of selective buyers and through deal IDs publishers earn better for their inventory sale.
It is seemingly that the power unbalanced between buyers and sellers, i.e., the sellers have an upper hand than buyers in this type of programmatic ads. So this model works when the requirements are too tight and for advertisers with deep targeting. Is this for you? You need to explore your options…
Great days ahead!