Private Market Place (PMP) : simplified — Kritter
It is very evident that advertisers nowadays are worried about things like brand safety, viewability, inventory quality, data capabilities, transparency, etc.
It all began with Open Auction…
To overcome those matters, publishers began to offer their inventories (page placements/ad units) and the usage of first-party data, through PMPs.
Real-Time Bidding (RTB) is where the price of Publisher’s inventory is decided by conducting an auction in real-time. Publishers place their inventory in an auction center (an ad exchange for example), every advertiser present there, bid against each other and lastly the highest bidder wins. But usually, the winner has to pay x cent more (generally 1 cent) than the second-highest bid (that’s second-price auction system).
The main difference between other auctions and Private Marketplace is that PMP is an invite-only auction where a publisher invites advertisers to bid on its inventory. A mandatory key called “Deal ID” will be generated/made by the Publisher, indicating inventory or inventories which will be allowed to be purchased programmatically. The buyer can then use a Deal ID set up/ target in a DSP.
A Private Market-Place commonly referred to as “PMP”, is where publishers have control not only over their ad inventories but on the CPMs, advertising parties, and the type of creatives as well. It also provides transparency in publisher-advertiser relationship. On the other hand, advertisers are fully aware of what they are buying.
Let’s have a look at the 3 major PMP deal types and their characteristics –
1. Private Auction
- This is similar to an open auction except, publishers restrict participation to selected advertisers only so they can bid only if they are invited to participate.
- Publishers can keep the inventory open to all selected buyers, or they can give selected buyers a “first-look” privilege.
- Usually a negotiation takes place between the buyer and seller.
- Publishers may sell inventory to the highest bidder above a set floor price because there is no pre-negotiated fixed price.
- This is done with multiple selected buyers and one seller.
2. Preferred Deal
- Under this, publisher negotiate privately with the buying party and decide a fixed-price CPM.
- This also enables publishers to sell their “premium media inventory” at a negotiated fixed CPM to selected advertisers.
- Buyers may request to look at inventory without any commitment to purchase it.
- Advertisers will win the impressions by bidding at or above the fixed CPM price set by the publishers. The same advertiser is then no longer eligible to bid on that same impression in the open auction.
- If multiple buyers bid at a fixed price, the highest fixed price wins but if the prices are the same for all those buyers, one buyer is chosen at random.
- This is done with multiple selected buyers and one seller.
3. Automated Guaranteed, also known as Programmatic Guaranteed / Programmatic Direct
- Here, a deal is negotiated and fixed directly between buyer and seller, considering inventory type, price and flight dates.
- The buyer knows exactly what audience and content they are buying.
- A use case for an Advertiser may be, if they’re looking for a 100% share of voice on the homepage, the would definitely choose this deal type.
- This is done with one buyer and one seller.
Furthermore, according to the above PMP Deal types, Auction type also varies. You would want to understand these majorly used Auction Types as well –
# First Price Auction
- Used to maximize revenue potential as there will be one seller and multiple buyers.If advertiser’s bid wins, they’ll pay exactly what they bid.
- Mostly used in Preferred Deal.
# Second Price Auction
- If advertiser’s bid wins, they’ll pay $0.01 above the second highest bid in the auction.
- Mostly used in Private Auction
# Fixed Price Auction
- This is used when a deal is negotiated and finalized.
- Mostly used in Programmatic Direct
Originally published at https://kritter.in on July 16, 2019.
