Private Marketplace – definition and benefits

Private Marketplace – definition and benefits

The online advertisement industry is changing rapidly. Sometimes it gets confusing and very hard to keep up with all the innovations and new terms, especially when different players use different terminology for the same things. We decided to initiate two-weeks introduction into some confusing terms and to explain them in details. Let’s start from the Private Marketplace – definition and its benefits for both Publishers and Advertisers.

Private Marketplace

Private Marketplace, also known as PMP, Private Exchange, Private Auction or Closed Auction, is a virtual venue for holding auctions between publishers and advertisers, where they make arrangements concerning their programmatically-run inventories.

The distinctive feature of PMPs is that it is based on the concept of exclusivity, which means that Publishers can pick up Advertisers they want to invite into an auction and to provide unreserved inventory to the selected group of Advertisers.

The negotiation part usually requires human interaction between both parties, while the technical side of the process is run programmatically.

Private Marketplace – main advantages

Benefits for Publishers Benefits for Advertisers
  • Able to command higher price premiums (through price floors), transparency
  • Access to Publisher’s inventory, transparency
  • Reducing the volume of inventory sold in the open market at remnant prices
  • Opportunity to manage the environment of placements
  • Possibility to require advertisers to lock in larger, longer-term contracts for direct and/or PMP purchased activity as a price of entry
  • Ability to make immediate modifications to the targeting criteria
  • Available on many of the largest programmatic exchanges
  • More control over buying
  • Can potentially replace a sales team with technology
  • Speed of optimization

Even though PMPs have barriers at times, it is clear that it can be beneficial for both Publishers and Advertisers. First of all, Publishers have complete control over selecting Advertisers they want to sell their inventory to. At the same time, Advertisers benefit from the opportunity of having the access to Publisher’s inventory. Secondly, both parties have relative transparency of the process, which again, helps to control their actions better and to choose what and to whom they want to buy/sell. Preferred buyers have even more benefits, such as leveraging additional valuable information or the right of first refusal over impressions.

In general terms PMPs serve as a bridge between Direct Sales and Programmatic solutions. Therefore, it has benefits of both of them. From one side, automated workflow increases the efficiency to sales process, real-time targeting concerning specific audiences, possibility to evaluate, target and customize ad creatives for each ad impression. From another side, there is a direct relationship between Advertiser and Publisher, availability of the premium inventory and custom deals, transparency.

Therefore, it can be said with a confidence that PMPs can be a valuable part of a brand’s digital media strategy. However, in order to develop the right strategy it is always important to test, evaluate and optimize during the whole process.

Next article’ll be dedicated to Automated Guaranteed.
Stay tuned!