The promise of private marketplaces is both alluring and straightforward. For brands, there’s the opportunity to reach engaged audiences of premium publishers with the efficiency of programmatic. For those premium publishers, there’s an opportunity to move inventory via programmatic, but at significantly higher CPMs than they can net in the open exchanges.
PMP proponents are quick to read off their advantages beyond the financial gain: they provide an avenue for buyers to transact with more intimacy and less friction than the open exchanges. In addition, creating a DealID is much easier than setting up a direct-sold campaign, says Jeff Mayer, Senior Analyst of Inventory and Programmatic Advertising at Whitepages, whose company has seen dramatic revenue growth from PMPs specifically.
In addition, a big benefit for publishers is enhanced control – they can tinker with inventory pools and floors to help sellers meet their goals, comments Phil Bohn, Director of Programmatic Media at SheKnows Media. In addition, PMPs can help monetize mobile inventory, which can be a particularly tough direct sell.
But the menial challenges in implementing and executing a PMP obscure its potential, as sellers and buyers alike get bogged down in the details. Private marketplaces have some very distinct growing pains: transparency and communication; achieving scale; and leveraging first-party publisher data and enhanced creative. Still, publishers committed to the channel feel the additional revenue is worth any difficulties and see that PMPs can offer competitive advantage while building tighter relationships with advertisers.
The private marketplace ultimately is the supply side offering, which means it’s up to publishers and their ad tech providers to navigate the pitfalls. However, this also means that publishers can lead the way in advancing PMP capabilities, by turning experiential evidence and learnings into serious revenue.
Paging a Specialist
With PMPs, there’s always plenty of room for human error. Stephanie Layser, recently named Head of Programmatic at ViralNova observed during her time setting up private marketplace deals with the Daily Mail that the more players in this game, the more chance for error. It’s tough for buyers and sellers to plug directly into each other. There are often several intermediary players between point A and point B – publishers may be working with SSPs that work with DSPs that work with agency trading desks and so on.
This can lead to miscommunications. Mayer cites a time when a demand source changed a price floor algorithm without notifying publishers. This threw off CPMs for Whitepages and led to a two week period of lost revenue from an advertiser with whom the publisher had had an established relationship.
In setting up PMPs, Match.com’s Director of Revenue Operations Jen Witt has worked with a variety of tech vendors — “any acronym you can think of,” she says. She says there were a lot of transparency and communication issues in the process – “definitely in the beginning, and a lot of publishers share this.”
It can be confusing when a buyer or a publisher, or both, take interest in PMPs out of an expectation that they will cut out intermediaries. “A PMP is still an intermediary,” Witt points out.
So a team programmatic specialist – or even one just focused on PMPs – is becoming a necessity to not only monitor these deals, but also facilitate communication between all the many parties involved.
“It’s tough if you don’t have a dedicated [programmatic] person,” says Bohn. It’s not enough, he says, to set up a deal in the private marketplace and then ignore it. “You’ve got to stay on top if it, look at it every couple days or weekly, make sure it’s transacting when you go live.”
Also, it’s important for everyone involved in these transactions to understand who they’re dealing with. Sellers and buyers can have closer contact within PMPs than they often do in open exchanges, and advocates say they must take advantage of this.
Witt offers an example of a “major CPG brand that does programmatic the right way,” and that uses the same provider for all its PMP deals. The brand can keep track relatively easily of where its dollars were going and where they were coming from. And furthermore, she says, Match.com had a contact with the intermediary. “When we had an issue, we’d know whom to talk to. Usually we don’t have that.”
Witt contrasts that with an example of how a PMP deal can fail, an example she says she’s seen repeatedly. The buyer would set up DealIDs, get really excited about it, and then nothing would happen because the brand would choose not to run a campaign. From a publisher perspective, she says, “you need to know the brand. Unless you know the brand [and their expectations], you’re not the site for them.”
Mayer observes that “One of the other issues we find is that [a] PMP requires a publisher to be reactive instead of proactive in campaign execution” — execution falls under the buyer’s control, which can lead to delays, including, he explains, in situations where the buyer is “less financially motivated or less technically equipped” than the seller.
On the surface, PMPs appear to offer limited scale compared to open exchanges, but the key to scaling a campaign is the right strategy. In addition, publishers have developed workarounds needed to smoothly execute buys and pass these tips along to would-be buyers.
For example: Mayer says his team has figured out it can add lines in the rule set to provide clarity into audiences selling at higher prices as well as to other parties looking at the same inventory. “I can pull a report and layer in rules, and that’ll show me what people are buying,” he says.
Because of the exclusive nature of PMPs, Layser says, buyers can hyper-target publisher audiences, which cuts deep into the scale. To counteract, a PMP must create the opportunity for advertisers to buy not just on the site or section they desire, but also on others of similar quality within the portfolio – even if they don’t necessarily know they want them yet.
As a network of web properties under a unified publisher umbrella, Bohn comments that some of SheKnows’ sites have much more name recognition than others, and as such move inventory faster. When buyers are not seeing enough of the audiences they crave within a PMP, “we can play with priorities within the SSPs or ad server to make sure inventory from other sites gets over,” he says.
Of course, this does require a high level of trust on the advertiser’s side, but that should be underwritten (or at least understood) in the original PMP agreement – the brand wants to work with this publisher because it has a valuable audience.
Gaining Buyer Commitment
Brand advertisers have proven willing to experiment with PMPs, but what publishers really want is long-term commitment. If brands make long-term investments in PMPs, they’ll have time to truly determine the marketplaces’ ROI as both sides learn how to best manipulate these tools. Publishers can then take that demonstrated value to brands and use it to boost their own CPMs.
It’s not terribly difficult to get brands to allocate the spending at first. “They’re told to invest in everything,” Witt says. But for brands or agencies to really be serious about PMPs, they need to understand the incentive or value coming to them. And it’s up to publishers to articulate that.
“It doesn’t matter what we’re calling these things,” Witt adds. “I need to understand as a brand or buyer what the inventory is.”
The key to garnering bigger brand commitment may be publisher first-party behavioral data, which many publishers have had trouble getting advertisers to leverage in PMP environments. In the US, advertisers tend to favor their own first-party data for targeting in these setups and fold in huge amounts of third-party data (think demographics) to scale campaigns. With the easy availability of third-party data, first-party publisher behavioral data isn’t quite so much a selling point for some advertisers.
By contrast, Witt has noticed that publisher first-party data is seen as a real asset by advertisers in the U.K. market, where third-party user data is limited and advertisers have to rely on other ways to hit their marks in their campaigns.
In the U.S., agencies and brand advertisers are wary of sharing their campaign goals with sellers out of apprehension that if publishers at large had access to this knowledge, they’d raise prices on their ad revenue across the board. But PMPs are a forum where agencies might want to make an exception. In theory, they’re already paying a premium for the privilege of looking at and reserving inventory from trusted publishers in a programmatic setting.
With knowledge of brand goals, publishers can leverage their audience knowledge to optimize campaign performance. Publisher first-party behavioral data tends to be more reliable than third-party demographic or intent data. In addition, publishers and advertisers may even share or match data – so-called second-party data, which is being facilitated in secure environments by DMP providers.
For buyers who don’t really know what their goals are, there’s less of a reason to be apprehensive about disclosing that information to publishers. And that gives publishers the opportunity to take the lead with making PMPs work well: to explain why a long-term commitment can be the best way to see ROI, and to work closely with agencies and brand advertisers to help them understand reasonable goals and how to reach them successfully.
Beyond data, recent major conferences like the IAB’s Leadership Summit have shown that more effective creative is a high concern across the digital advertising industry. Although current capabilities are not universal, Layser suggests that enhanced or custom creative could become a major selling point for PMPs.
PMP can enable the use of more complex and engaging ad units than the open exchanges – beyond standard IAB units and even Rising Stars. With closer integrations, PMPs can support advanced units or even publisher “native” units. Some publishers are using their recently launched creative studios to build specialty units for advertisers (sometimes built in HTML5 to avoid mobile/responsive design troubles), which then are leveraged by the trading desks.
With priority access and optimization via first-party publisher data, enhanced creative is like the icing on the PMP cake.
Unlocking the potential of PMPs – and positioning them for the future – requires publishers and their platform provider to step up and own the technology. So here’s a basic “owner’s manual” – some best practices for bolstering your PMP program.
- Have a programmatic specialist that ensures setups and executions are up to spec while facilitating communication throughout the various players involved, including intermediaries.
- Take advantage of PMPs’ intimacy to better know your brands, including how and what they like to buy.
- Explain to advertisers that sharing campaign goals will allow you to leverage first-party data for optimization; in turn, this will help gain larger buyer commitments.
- Ensure that your PMPs can support enhanced units and evangelize the opportunity to your advertisers, even offering to assist in building creative.