Private programmatic marketplaces and PMP deals are common buzzwords in the publisher and advertiser communities. But what are they really?
So what is a private marketplace (PMP)?
A private marketplace is your own little auction house for ad views. The buyers competing for those views are ones you invite to join.
Private marketplaces or PMPs are like a members’ only club where members are served exclusive offers that are not offered to non-members. Just like other private membership clubs, the intimate setting generates trust and increases transparency on both sides. Premium programmatic with PMPs is a kind of bridge. It fills the gap between resource-consuming direct deals (that don’t always yield the best CPMs possible) and open RTB exchanges (where publishers are not ready to offer their premium inventory).
In recent years, PMPs saw a decline in popularity because PMP implementation has always been considered unscalable. Less advertisers vying for your inventory meant that PMPs were usually placed at the bottom of a publisher’s ad inventory waterfall. But that all changed with growing adoption of header-bidding.
Header bidding is yet another buzzword being thrown around in the publishing and advertising communities. What it is (in a nutshell), is a piece of code that lets different demand sources compete for the ad view even before the page loads.
Instead of a waterfall where demand sources compete sequentially, header bidding allows for a single unified auction that ultimately yields the highest revenue for the publisher.
Why is header bidding changing the way publishers look at PMPs? Mostly because it allows for premium programmatic to compete much higher in the waterfall and bring in higher yield for publishers.
A few years ago, a publisher waterfall would look kind of like this:
Without header bidding, even the First Look PMPs were pretty low in the cascade and direct deals were king.
With header bidding, the waterfall is inverted, and direct deals are actually lower than PMPs. If you’ve been looking for a reason to get your direct advertisers to switch to PMPs – this might just be it.
Is PMPing for YOU?
While cutting out the middleman does increase your yield, running a PMP has its own costs involved. What this means is that you need more than just a well-defined niche audience for advertisers to target, but also enough traffic to make the investment in PMP worthwhile over time.
PMP Life Challenges
Nobody likes to pay the middleman for a job they believe they can do themselves. But cutting out this middleman comes with its own set of risks and hurdles.
- Keeping everybody happy – What happens when a number of direct advertisers are after the same audience?
- Data and reporting – How transparent do you want to be with your advertisers?
- Fill rates – How can you maintain a high enough fill rate for a PMP?
- ROI – What is the criteria for the success of a PMP deployment?
- Trust – Direct relationships between advertisers and publishers are great, but trust is hard to come by.
Getting it RIGHT
So now that you have a pretty good idea of what PMPs are and what the challenges in maintaining one are – let’s discuss how a PMP strategy should look in 2016.
1 – Don’t fire your direct sales team (yet)
One of the major advantages of a private marketplace is the reduction in overhead when it comes to managing client campaigns and accounts. However, if you want to keep your premium advertisers around, you need to make them feel cared for.
2 – Work with the right partners and technologies
It’s crucial that you select the technologies most suitable for your business and your premium advertisers. You need to combine technological solutions that offer an efficient way to access demand, and a decision engine to prioritize deals for maximal revenue and fill rate.
3 – Understanding and packaging your inventory
Once you understand what you have to offer, and can communicate it to advertisers, you want to make sure it’s bringing you the most money. Remember that dream all publishers dream? Well, that. To make the most yield from your inventory, you need to diversify and structure your pricing and waterfall accordingly.
Don’t forget to take into account all the components of the package like reporting, floor prices, flight times, targeted devices, segments and specific placements on your digital properties.
4 – Transparency levels and data sharing
To help your advertisers get good performance and keep coming back with budgets you must ask a lot of questions. Answers to these questions will help you a lot with the process of inventory packaging for select clients. What is the target audience of this advertiser? What is their budget and what inventory can you offer them for maximal yield for you and best performance for them? What creatives, products or brands will be offered to your beloved audience? Your in-depth familiarity with your content consumers can go a long way in helping you and the advertiser in building effective campaigns that will keep the audience happy, too.
5 – Communicate, experiment and optimize
Even if you do get answer to all the above questions when setting up a PMP deal, it’s not enough. Things change. New advertisers are added to your waterfall, new inventory placements become available or can be made available for valuable advertisers. On the demand side, campaigns can change in terms of goals, creatives and budgets. Remember that sales team we told you not to fire? Make sure they work with your clients – your advertisers – on optimizing their efforts to surpass their KPIs.
PMP deals and private marketplaces are the best way to dip your toes into premium RTB. And not just for you – for advertisers as well. Odds are your competitors are already running PMP deals with their supply channels, so you should be as well.