Today, the most common form of digital advertising is a hybrid of open exchange and private marketplaces. As the demand for more control, better ad quality, and improved brand safety grows, marketers have been looking to private marketplaces (PMPs) to solve them.
According to eMarketer, next year, private marketplace buying will overtake the buying on open exchanges for the first time. The forecast shows that marketers in the United States will spend $12.22 billion on open exchanges and $11.56 billion on the private marketplace this year. By 2021, those figures will rise to $13.77 billion and $15.97 billion, respectively.
Let’s dig into what is private marketplace advertising and why you should use it.
What is private marketplace advertising?
The programmatic media buying ecosystem operates with multiple auctions, with each level of the “waterfall” holding its parameters for price and access. A private marketplace (PMP) is a real-time bidding environment where a publisher makes its inventory only available to select advertisers or buyers through an invite-only process. This inventory is just one auction level above the open exchange and is purchased programmatically but has price and access restrictions set by the publisher.
The auction for private marketplaces is done using deal IDs, which connects the demand-side platform (DSP) to a publisher’s pre-existing supply-side platform. Similar to the open exchange, advertisers bid using a cost-per-mille (CPM) model, which allows them to select specific audiences or content that is more valuable to them.
- Advertisers benefit from the efficiency that private marketplaces provide, instead of relying on humans to work with publishers or specific websites to broker deals. They can purchase the inventory space using their demand-side platform.
- Publishers and advertisers value the brand safety that private marketplaces provide. With more control over placements, advertisers don’t need to be surprised to find their advertisements next to violent and extremist content.
- With private marketplaces, advertisers have access to more data from the publisher within the deal IDs. They can make more informed decisions about their messaging, placements, formats, and more.
Choozle has secured access to a collection of pre-negotiated PMP deals that are accessible to use within your campaigns. This invite-only marketplace collects high-caliber publishers and supply-side providers across display, video, audio, native, and connected TV.
How is it different from the open market?
To understand how private marketplace advertising inventory is different from the open exchange, you need to understand the different types of auction types.
There are several different ways of acquiring inventory in the real-time bidding (RTB) ecosystem. Generally, these tiers, or auction types, include open market, private marketplace, and direct. Each of these auction types offers its unique benefits as well as access. As you traverse the different auction types, access will be more restricted, and costs will increase.
Open market:Sitting at the bottom of the RTB ecosystem, the open market is, as the name suggests, open to all publishers and advertisers. They are eligible to participate simultaneously in the buying of available inventory, and the highest bid wins.
Private marketplace: In the middle of the RTB ecosystem, a private marketplace is an invitation-only auction where a deal is traditionally made directly between a publisher and a select group of advertisers. This inventory can include premium placements like the homepage, specific site sections, sub-sections, or creative formats that may not be precisely targetable in the open market environment. Publishers can limit who can access this action and set a minimum CPM (i.e., floor price). Due to its invite-only access, fewer advertisers are bidding on the inventory.
Direct: At the top of the RTB ecosystem, direct can be guaranteed inventory, also known as “programmatic direct” or “programmatic guaranteed.” This is the direct sale of reserved ad inventory between a buyer and seller, with automation replacing the manual insertion order (IO) process. This type of auction allows the publisher to regulate the price of inventory to buyers. It also gives buyers the ability to buy more premium inventory directly from the publisher transparently.
Why use private marketplace advertising?
Private marketplace advertising inventory and usage is growing in adoption with advertisers 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 worlds.
Even with its higher CPM price tag, advertisers seek more control over the specific inventory they are bidding on, which is inherent to a private marketplace model. Advertisers are looking to increase their brand reputation by aligning their brand with high-caliber publishers and piggyback off the apps and websites’ strong reputation to strengthen their brand.
Buyers are happy to pay the higher CPM expenses associated with bidding on that inventory since they can also receive more benefits with programmatic media buying. Such as, they can layer on first and third-party data, use bid parameters, and more to further their targeting strategy.
Private marketplaces can be an effective approach to have controls, negotiated CPMs, and knowledge about inventory sources. Below are some example PMP deals for specific verticals.
- Realtor.com – ROS – Desktop – 300×600 – Display
- Triad Retail – Run of Site – Display
- Wayfair – Desktop – 728×90 – Display
- Scripps Networks – HGTV, DIY Network – 300×250, 728×90 – Display
- Nextdoor – ROS – Mobile In-App – Native
- Zillow Group – US – RON – Zillow, Trulia, Hotpads, StreetEasy – Display
- Microsoft – Outlook.live.com – Display
- Telaria – Desktop & Mobile – Business – Native
- NewsCorp – Dow Jones – The Wall Street Journal, MarketWatch & Barron – Display
- Forbes – ROS – Mobile Web – 320×50, 300×250, 300×50 – Display
- Business Insider – Desktop – ROS – Display
- TripAdvisor – US – RON – Desktop and Mobile Web – Display
- “Conde Nast – LDA-Compliant – Desktop, Tablet & Mobile – Display
- Scripps Networks – TravelChannel.com – Display
- Fox News – US – Travel Section – 300×250, 728×90 – Display
- Library – Watch Holiday Shows – Connected TV
- Hallmark – Hallmark Holiday – Display
- Vox Media – Global – Holiday Gift Guide – 300×250, 728×90 – Display
- AMC Networks – US – Best Christmas Ever 2020 – ConnectedTV (CTV) – Video
- eBay – ROS – Desktop – Display
- Bustle Digital Grou – US – RON – Display
- Buzzfeed -RON – Desktop & Mobile Web – Display
- AOL Mail – ROS – Standard Look – 300×250, 160×600, 728×90, 300×600- Display
- Comcast – XFINITY Run of Site – Display
- Yahoo! – Comms (Mail & Messenger) – Display
- Match Media Group – LDA 21+ – Desktop & Mobile Web – Display” (Match.com & OKCupid.com)
- Jukin Media – FailArmy – Connected TV
- Resignation Media – Chive.com – ROS – Desktop and Mobile Web – Display
- Legacy.com – Desktop – 300×600 – Display
- TMZ.com – US – ROS – Desktop & Mobile Web – Display