Leave it to Google to blur the lines between direct and indirect sales. In June, DoubleClick launched Preferred Deals in beta, allowing publishers to offer chosen buyers a sneak peek at certain inventory before it hit the wider exchange. However, the inventory is fixed-price – fixed price and non-guaranteed? Madness! We caught up with Google Senior Product Manager Drew Bradstock to get the lowdown on the project’s progress.
Can you give us a quick breakdown of Preferred Deals?
Earlier this year, Google announced Preferred Deals on the Ad Exchange, which was built to help publishers find incremental revenue in the “middle tier” between their direct and indirect sales. Preferred Deals (formerly called Direct Deals) is a sales and operations tool that makes it easy for you to privately offer inventory to select buyers in a fixed-price, non-guaranteed fashion–before it enters the general auction.
Preferred Deals are best suited for publishers who typically sell their inventory anonymously, (or through other channels), and who are looking to connect with buyers in a discrete way. Buyers benefit by getting direct access to inventory they can’t find elsewhere. This interface provides a streamlined process for soliciting and negotiating Preferred Deals, enables you to find buyers that you may not have any existing relationships with, and gives you and your demand partners a more efficient alternative to phone calls and emails.
How is the project going?
It’s going well but bringing direct, fixed-price deals into the exchange market comes with a set of challenges. At launch, we saw premium publishers quickly receive offers from larger buyers, which lead to a number of deals right out of the gate. The deals have lead to higher CPMs for publishers and have provided new inventory for buyers.
In order to keep the deals performing well, both parties have had to be quite honest in terms of the volume of inventory publishers will offer, and also about how much of the available inventory a buyer will purchase. Once publishers and buyers began being open about their expectations, these deals started transacting very well. Ad Exchange’s Preferred Deals offer system has really cut down on the time required to find new potential deals and on the effort required to get an offer live.
How do you think this compares to private marketplaces?
Private marketplaces are top of mind for publishers as they look to increase yield from their unsold direct inventory. The challenge has long been about the amount of overhead in creating and managing a new type of market, and about balancing a private market with direct sales.
To simplify the management of fixed-price deals and private exchanges, Ad Exchange will be adding private exchanges to AdX Preferred Deals. Publishers will eventually be able to choose between having Preferred Deals at either a fixed price with a single buyer, or have a private second-price auction with multiple buyers. If Preferred Deals buyers don’t purchase the impression through the Preferred Deals interface, then it will flow seamlessly into the general auction.
More important, we’re integrating Preferred Deals into DoubleClick for Publishers and allowing both fixed deals and private exchanges to be booked at any priority the publisher chooses. Ad Ops can then change the priority of their private exchange relative to their direct sale commitments and still benefit from AdX demand and fill rate. As the sell-through rate and yield from the private exchanges increases, it will become easier for Ad Ops to make adjustments right in the ad server.
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