Online advertising is a notoriously difficult landscape to navigate, thanks in part to the number of buzzwords and acronyms in use. In this post, we’ll unravel one of those: PMPs, or Private Marketplace deals. PMPs offer publishers a way to secure potentially higher bids from a select group of advertisers, so are well worth being versed in.
Open Auction VS Private Marketplace
The most common way that ad inventory is sold is in real-time through Open Auction. As the name suggests, this is an auction that is open to any advertisers on the platform being used and is conducted in “real-time,” i.e. as each impression is offered for sale.
PMPs are also conducted in real-time but only selected advertisers can compete in the auction (hence “Private Marketplace”). This might seem counterproductive, but advertisers are often willing to pay a premium to access more exclusive inventory. The most noteable difference between Open Auction and Private Marketplace is that PMPs are invite-only, which means that publishers invite select advertisers to purchase their inventory.
Types of PMP – Private Auction vs Preferred Deal
PMP terminology does vary between platforms, but there are essentially two distinct types of PMP. Within Google Ad Manager / AdX, these are termed Private Auctions and Preferred Deals.
Preferred deals allow publishers to offer inventory to a single advertiser at an agreed minimum price. The advertiser can then secure that inventory at the agreed price through which buyers they use on the platform. The inventory offered could be exclusive to that deal or could be offered as a “first look” with the same inventory being passed to open auction if not bought.
Private Auctions involve multiple, pre-selected buyers. Similar to the Open Auction, bids are submitted in real-time, but with only the invited buyers able to participate. Private Auctions can be used on exclusive inventory, or as an auction for a first-look on other premium directories with the Open Auction used as backfill.
What are Private Marketplace Deals (PMPs)?
The term “PMP deal” is a less platform-centric version of “Preferred Deal”. Within the Google ecosystem, it will often refer to the record of the Preferred Deal within the Google Ad Manager User Interface. As each Preferred deal has to be negotiated and agreed it creates a deal in the system where both buyer and seller agree on the price and other metrics.
According to eMarketer, 2020 is set to be the first year whereby Private Marketplace ad spend will surpass Open Exchange. The surge in investment has been driven by two main factors. The first is improved capabilities for discovering, planning and transacting in Private Marketplaces. The second driver is the impending death of Third-Party Cookies, which has lead to a major focus on first-party data.
A note on Programmatic Guaranteed
In a nutshell, Programmatic Guaranteed allows advertisers to purchase a guaranteed number of impression for a fixed CPM. Programmatic guaranteed deals give buyers the means to cookie match at an agreed price, getting a look at each request with the option to buy it if it meets the agreed criteria.
When discussing PMPs you will often also see reference to Guaranteed Deals, Automated Guaranteed and Programmatic Guaranteed. These are other programmatic deal types but are not strictly speaking PMPs (as they are not settled through real-time bidding). You can learn more about programmatic deal types here.
What are the benefits of Private Marketplace Deals?
- Publishers benefit from a reliable and consistent stream of revenue.
- Publishers are given more control over what advertisers purchase their inventory.
- PMPs often yield higher CPMs as advertisers are willing to pay more for premium inventory.
- Stronger relationships between advertisers and publishers.
- Better ad quality.
- Offers advertisers direct access to unique first-party data which allows for better targeting.
What are the drawbacks of PMPs?
- It’s very easy to price poorly and lose revenue.
- Publishers can sometimes undersell their inventory if sold through PMPs during peak shopping periods, such as Q4.
- More administration time.
- PMPs are not guaranteed and time spent setting them up can yield $0 revenue.
Where to start with PMPs
Whichever type of PMP you are considering using, the starting point is having advertisers willing to participate. Identify frequent or high paying buyers and those who bid frequently without winning from your AdX reports. With that information, you can research the buyers in charge of those campaigns and make contact with your PMP offers.
Need help attracting and trafficking PMPs? Publishers that work with OKO get direct access to our expert support team who can help advise and assist on a whole host of monetization matters. Find out more about our solutions and how OKO could help you grow your advertising revenue.