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The Private Marketplace: Everything Publishers Need to Know

June 15, 2021

Private marketplaces still generate as much of a buzz today as they did nearly a decade ago. In fact, if online articles and posts are to be believed, private marketplaces, or PMPs, have been rising in popularity since 2015. It’s been called many things, from the “death knell for publishers1” to “the future of online advertising2,” and everything in between.

Today, a private marketplace holds many benefits for publishers and advertisers alike. However, not all publishers know how to turn its robust features to their advantage, or even whether they should use a PMP or not.

In this article, we’re going to explain:

  • How private marketplaces work.
  • Why they’re popular among advertisers and publishers.
  • How PMPs fit into the programmatic ad ecosystem.
  • The advantages and disadvantages for publishers.
  • How advertisers benefit from a private marketplace.

Whether you’re looking for a way to expand your revenue streams or improve your CPMs, a private marketplace might be the ideal solution.

What Is a Private Marketplace (PMP)?

A private marketplace is a private, invite-only programmatic marketplace where publishers can sell their premium inventory directly to advertisers they choose. They combine the exclusivity of private deals with the efficiency of programmatic real-time bidding.

Is the Popularity of Private Marketplaces Growing?

If programmatic direct is still the king of programmatic display advertising, the private marketplace has finally taken its spot as queen. According to eMarketer, private marketplace ad spend exceeded spend on the open exchange in 2020 and will continue to do so in 2021. As more buyers pull their ads from the open exchange, the gap is likely to continue growing.

Source: eMarketer

Advertisers are clearly enjoying the advantages that come with dealing directly with a publisher. In return, publishers get to enjoy higher CPMs and more control over their inventory. It’s a winning combination that favors both parties.

What Is a Deal ID in a PMP?

Like other programmatic direct deals, the private marketplace deal uses a deal ID. A deal ID consists of a unique 19-character string generated by the publisher’s ad server or SSP, and it’s passed along with every bid request. That allows the demand-side platforms to recognize the deal and structure the auction and bidding process accordingly.

Where Does the Private Marketplace Fit Into the Programmatic Ecosystem?

The private marketplace is still part of the programmatic ecosystem, using many similar technologies and processes.

PMP deals sit somewhere between the open exchange and direct programmatic deals. Many publishers segment and reserve their premium inventory for a private marketplace while leaving the remaining ad space for real-time open auctions.

The Pros and Cons of a Private Marketplace for Publishers

Like any other type of programmatic ad strategy, private marketplaces have certain advantages and disadvantages. Publishers must be aware of both before deciding to include PMPs in their monetization strategy.

Pro: Inventory Control and Flexibility

A significant pro for publishers is the amount of control and flexibility granted by a PMP. As a publisher, you’ll have more control over your ad inventory and how you package and sell your ad space. It also allows you to negotiate for better terms with trustworthy buyers.

For example, publishers can reserve premium above-the-fold (ATF) inventory for select buyers at a set price in a private marketplace.

Pro: Premium First-Party Data and Higher CPMs

Buyers want to know that their ads are going to be seen by their target audience. As part of a private marketplace deal, publishers can share first-party data with advertisers.

That transparency can give buyers the necessary insights and, consequently, make your ad inventory more valuable. With the upcoming phase-out of third-party cookies, first-party data is going to become invaluable.

Pro: Quality Control and Brand Reputation

While publishers have access to certain filters and block lists on open exchanges, they still have little control over the types of ads being served. Depending on your exchange or ad network, this may lead to poor quality creatives and inappropriate ads making their way onto your site, damaging your brand reputation in the process.

In a private marketplace, publishers can selectively invite advertisers to bid on their inventory. Resultantly, publishers have more control over the types of creatives that’ll be served via premium spots on their site.

Con: No Revenue Guarantee

In PMP deals, publishers aren’t obligated to meet specific impression volumes. However, advertisers also aren’t obligated to buy your inventory through the private marketplace. You may spend a lot of time and effort crafting a killer PMP deal, only to find that you’ve overestimated your buyers’ interest in the offering.

Con: Time-Intensive Management

PMPs may be beneficial, but structuring these deals can be time-intensive. Additionally, publishers need to spend significant amounts of time managing their offering once the agreement is in place. Bid prices may need to be altered depending on demand, market trends, or seasonality. There may even be additional negotiations required.

In short, unless you have the time and sales and technical knowledge to adjust your offering continually, partnering with an ad tech service provider may be critical.

Con: Not Immune to Ad Fraud

Not too long ago, one of the biggest pros of using a private marketplace was the reduced risk of ad fraud. Unfortunately, while the risk is somewhat lower, PMPs are still susceptible to botnets, malvertising, and other types of ad fraud.

According to Human Security (White Ops), research shows that PMP deals are just as susceptible to ad fraud as non-PMP deals. To lessen the impact of ad fraud, publishers need to use a private marketplace that’s specifically engineered to be immune to internal and external attacks.

Why Advertisers Prefer Private Marketplaces

PMPs aren’t just beneficial to publishers. Buyers can also benefit greatly from buying ad inventory from a private marketplace.

Access to Premium Inventory and Deeper Insights

Access to premium inventory is one of the most appealing elements of private marketplaces. Buyers are more willing to compete for top-quality ad space, which will lead to increased lead generation, better conversion rates, and improved ROI.

Additionally, publishers may choose to share first-party data with buyers, giving them valuable insights into the audience. This way, advertisers know that their ads will be shown to relevant viewers.

Brand Protection

By dealing directly with a publisher, buyers can be sure that they won’t suffer damage to their reputation due to a poorly or inappropriately placed ad. They can also ensure that their ads only show up against relevant, brand-safe content.

Conclusion: The Best of Both Worlds

Private marketplaces offer publishers a great way to get the most out of their premium inventory without doing away with automation entirely. PMPs provide advertisers the best of both worlds; security, control, brand safety, and boosted revenue and impressions.

Are private marketplaces for everyone? Probably not. Getting the best results can be a time-intensive and highly technical process. While it may be easy for large publishers to maximize on PMP deals, smaller publishers who lack that reach face a more significant challenge. By partnering with an ad tech services provider like Rev·Amp, publishers can take advantage of our pre-existing premium deals.

1https://techcrunch.com/2015/01/03/private-marketplaces-the-death-knell-for-publishers/

2https://www.business2community.com/ecommerce/the-future-of-online-advertising-private-marketplaces-versus-open-exchanges-02247761

is a Strategic Partnership Manager at Softonic. As Strategic Partnership Manager, Maria is responsible for identifying strategic publishers and help them optimize their site for maximum yield as well as being on the constant lookout for opportunities to improve monetization capabilities.
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