The difference between a private marketplace and an open marketplace in the realm of programmatic buying is that a private marketplace gives a publisher tighter control over the type of buyers, advertisers, and creatives that will display on their site, but without having to manage individual advertisers as they would in a direct purchase ( Programmatic Direct). Typically, CPMs (cost per thousand impressions) are much more competitive in a private market than in an open one, because premium advertisers are competing for the highest-quality ad inventory on big-name digital media.
If we operate through Private Marketplaces , the buying platform (DSP) connects directly to the premium publisher’s inventory feed . This inventory is generated in a private Ad Exchange, which works by restricting access and only allowing a small number of buyers to bid. In this sense, we can distinguish between private auction and private agreement.
Despite working in an auction environment, in a Private Marketplace the terms of the agreement are previously negotiated between the buyer and the seller, and the advertiser must be approved , so it is a more manual procedure than what takes place in open exchanges. When operating on a PMP, a unique identifier is generated to represent the terms of the transaction that was made between the buyer and the seller, called a Transaction ID.
Private auction vs. open auction
Private auctions are opposed to open auctions, which are those in which there is no direct relationship between the advertiser and the support. In private programmatic purchase auctions, apart from the fact that there is exclusivity in terms of access to inventory, greater transparency is a fundamental characteristic , since the advertiser knows the inventory in advance and can choose whether or not to buy a printing at a certain price.
When a private auction is started, the support sends an invitation to the buyers through the deal ID and sets the minimum price of the auction. At this point, advertisers have the opportunity to bid among themselves for a given impression, before it goes up for open auction .
Private agreement or preferred deal
Although private agreements in programmatic buying also belong to the environment of private Ad Exchanges , the difference with private auctions is that, in this case, the acquisition of impressions is not done through bids, but through an agreement between the advertiser and the support. In the private agreement a fixed price is negotiated and the buyer can buy or not buy. The private agreement in programmatic is a priority, and is placed above the private auction. Although the private agreement bears a lot of similarity with the direct sale or programmatic direct , in the preferred deal no inventory reservation occurs.
What is Programmatic Direct and its difference with RTB
Programmatic buying also allows advertisers to buy ad impressions in advance on specific placements offered by publishers. This is known as Programmatic Direct or Programmatic Premium . Basically, it is an automated process that gives a certain guarantee to space purchases.
As opposed to Real Time Biddig (RTB) -which consists of buying ads through auctions- Programmatic Direct consists of making guaranteed offers for a fixed price . The difference between Programática Premium and RTB is that the former works through pre-agreements instead of auctions, despite the fact that both use technology to detect the target.
Difference Between Programmatic Direct and Private Marketplaces
Unlike the private Marketplaces , Programmatic Direct has a guaranteed inventory , the sale occurs directly and does not require human intervention in its execution. in Programmatic direct these direct deals allow for better price control than can be done in an open RTB market.
In Programmatic Direct, a publisher’s sales representative can negotiate a deal with an advertiser that includes Tier 1 inventory , such as homepage takeover ads at a fixed price and for a guaranteed number of impressions. It’s the equivalent of booking a hotel room directly through the hotel, rather than through an online retailer.
Programmatic Direct, compared to open models, offers media planners more simplicity and guarantees less risk . Additionally, sellers get access to publisher context and segments. This programmatic model is one of the fastest growing fields of digital advertising. According to data from Google , half of the investment in programmatic buying in the United States already goes through a direct agreement , since it offers greater control in the purchase by reservation, segmentation and coverage.
Private Marketplaces : benefits
While direct buying pursues a branding goal in the hope of getting conversion volumes with a very low CPM, having a deal ID gives you easy access to quality impressions. Thanks to the Private ID deal Marketplaces , it is possible to apply the same tactics and strategies that have been successful, access inventory before it hits open exchanges, and potentially gain additional reach among those users who are not on open exchanges. In this way, only one offer is made and a cookie, impression or user that meets the pre-established criteria is purchased.
In this sense, it is worth enumerating the benefits provided by Private Marketplaces regarding the open market:
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- transparency . Both the publisher and the advertiser have a very clear idea of what kind of inventory they are buying, what CPM should be paid, and what creatives are running.
- Program efficiency . Advertisers can quickly and effectively set up new live buys on top-tier websites or even bundle inventory in specific vertical segments.
- They standardize the industry . Available on many of the largest programmatic exchanges including DoubleClick Ad Exchange, AppNexus , MediaOcean , and Kantar Media.
- They eliminate the need for a direct sales team. It can be quite expensive and time consuming. PMPs can replace a sales team with technology.
Although the private marketplaces are still relatively new and have barriers, it is obvious that they will become an integral part of the ecosystem, positioning themselves as a more advanced and integrated programmatic buying technology.
