If you are involved in the ad tech industry, or you like to keep abreast of news and developments, you may have stumbled across private marketplaces. Also known as a PMP, a private marketplace enables publishers to offer inventories, ad spots, and advertising opportunities to selected or targeted audiences.
Private marketplaces have become increasingly common in recent years. In 2021, for example, more than 50% of real-time ad spend was generated via private marketplaces. One of the primary reasons for the shift towards private marketplaces is the vulnerability of open marketplaces to fraud. Between 2018 and 2023, the global cost of digital fraud increased from $35 billion to over $100 billion.
In this article, we’ll discuss and explain how PMPs work and explore key advantages for publishers and advertisers.
What is a private marketplace?
Before we delve into the benefits of using private marketplaces, it’s important to understand exactly what a PMP is. A private marketplace is a digital marketplace, which offers exclusive access to advertising opportunities for specific parties or bidders. A private marketplace offers an alternative to open spaces, which enables anyone to gain access to inventories and bid for ad space. If you opt to use private marketplaces, you can control who has access to premium ad inventories to attract high-quality, reputable advertisers.
Private marketplaces are exclusive advertising arenas, which operate on an invite-only basis. Publishers create their inventory and then select groups of buyers or advertisers. In most cases, buyers utilize programmatic methods, rather than direct-buy systems, to buy ad space. This often involves a fixed price and an inventory guarantee.
Private marketplace transactions combine the benefits of traditional and modern marketing by providing direct access to inventories to enable buyers and publishers to establish relationships while taking advantage of innovative, efficient technology and automated workflows.
The advantages of private marketplace advertising
PMPs enable publishers to invite target groups to bid on inventories, providing them with greater control over bidder access and maximizing the chances of securing premium ad sales, including exclusive inventory packages, at a good price.
There are several advantages to using private marketplaces for publishers and advertisers. We will examine these in detail below:
1. Enhancing Brand Reputation
Enhancing and protecting brand reputation is one of the most significant benefits of using private marketplaces for publishers. By controlling who has access to their inventories, publishers can ensure that ad space is occupied by reputable, trustworthy brands that run high-quality, engaging advertising campaigns. PMPs offer more protection than open marketplaces, which restrict publisher control.
As well as enabling publishers to determine who has access to premium inventories, private marketplaces also provide a degree of control in terms of the type of content that appears on their websites. Publishers have the flexibility and power to choose advertisers that align with their brand and its values.
For advertisers and buyers, accessing private marketplaces also offers opportunities to shield brand reputation, as they can enjoy peace of mind that they are working with reliable publishers with a proven track record. There is minimal risk of adverts ending up embedded within potentially offensive or controversial content.
2. Premium on first-party data
When using private marketplaces, publishers offer access to first-party data to advertisers. This is increasingly influential and valuable amid the diminishing impact of third-party cookies. Utilizing first-party data gives buyers more confidence when targeting specific markets and audiences. PMPs enable brands to share first-party data safely, securely, and effectively, which is not always the case with open marketplaces. Data can be muddled, there may be restrictions and limitations in place, and advertisers have fewer choices.
Gaining access to first-party data from publishers, including traffic volume and engagement rates, enables advertisers to track progress, modify messaging and make decisions based on data to elevate performance levels and efficacy. Users also benefit because they receive or view targeted adverts, which are relevant to their interests or desires, rather than irritating messages that don’t apply to them.
Transparency is one of the most important benefits for advertisers, as they can access data directly from the publisher. Every participant who is invited to the auction knows who they are working with, what they are getting for their money, and how the inventory is valued. This enables bidders to enter into transactions with the ability to make decisions based on accurate information and data. Advertisers have the clarity and confidence to plan campaigns and strategize and they can also enjoy peace of mind, which is not always guaranteed with open marketplaces.
PMP deals enable publishers to offer buyers a superior level of transparency, as advertisers can see what the inventory comprises, ensure that they understand how the auction process works, and make sure they know where the adverts will be placed. Publishers can also benefit from transparency because they know exactly who can bid on the inventory.
4. Programmatic efficiency
PMPs offer the best of both worlds. They provide opportunities to take advantage of programmatic efficiency and innovative technology without the risks associated with open marketplaces. Automated workflows simplify and streamline bidding processes, even offering the option to replace or reduce the scale of in-house sales teams.
Smart PMPs offer the following programmatic advantages:
- Simple, quick deal creation with enhanced user experience
- Enhanced visibility
- Maximize the value of auction inventories to boost revenues
- Improved security
- Single opt-in is required for optimum simplicity and speed
- Avoid the groundwork associated with direct sales
5. Better inventory control
Gaining control of your inventory is beneficial for publishers for multiple reasons. Private marketplaces enable publishers to allow access to premium inventories to select parties and bidders, increasing the quality and volume of leads, boosting conversion rates, and optimizing ROI. Risks are reduced in comparison with open marketplaces, where publishers can lose money if the deal doesn’t go to the highest bidder.
PMP transactions also enable publishers to determine how they want to market and promote their inventories, offering greater flexibility. The process of using PMP marketplaces enhances control through the creation of unique deal IDs.
Both publishers and buyers can benefit from PMP deals, as campaigns run more efficiently and the value of the inventory increases. Publishers have the ability to control who bids while advertisers gain access to premium packages and top-tier sites.
Private marketplaces enable publishers to offer exclusive access to ad space by inviting targeted groups or parties to bid. Offering an alternative to open marketplaces, PMPs offer advantages to both publishers and advertisers, including enhanced inventory control, transparency and efficiency, the ability to protect and enhance brand reputation, and the opportunity to access first-party data directly from the source.