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Oct 24, 2017 8:00:00 AM

Best Practices: The Move to First-Price Auctions: Part 4, PMPs

Private Marketplace (PMP) best practices for publishers choosing to migrate to a first price auction

(Part 4 of a 5 part series on Best Practices for First Price Auctions

On to PMPs...

We will look at the best practices for private deals in a first price world from both existing business and new business perspectives.

Existing business:
Will your PMP auction logic move to first price? If so, first thing to do is share this information with your demand partners. Some know how to adapt (by adjusting their bid level), some do not…
For those ones, a best practice would be to move your existing PMPs to fixed price (as a reminder, a fixed price deal with a $5 ask price will clear at $5 whenever the buyer is bidding above the ask price).

Anyway, right after transitioning to first-price auction model, you should monitor closely your main PMPs using bid landscape analyses:

  • make sure participation does not drop suddenly (or after a few days)
  • detect buyers starting to be disqualified by bidding below their ask price
  • compare trends on your inventory to market figures to strip seasonality off of your analyses
The above will insure the transition to the new mechanic does not disrupt what many on the buy-side consider the preferred channel and you will have built trust by taking the initiative here.

Note that whereas buyers tend to monitor open auction spend and performance at the platform (i.e. SSP) level, PMPs are usually monitored individually - hence increasing the importance of a smooth and controlled transition.

New Business:
First, given the current disparities between SSP’s pricing models, PMPs might look like a safe haven (price-wise) for buyers, and a powerful selling argument (you are offering demand partners a price-controlled environment in those troubled times!). Keep that in mind, especially when discussing with buyers not aligned with the current open auction logics.

As for best practices in pricing PMPs in a first-price auction world, stay tuned! We will soon publish data-driven insights and findings on the topic. As a general recommendation, we encourage sellers to rely on market insights (average ask price for a buyer on the market for a given content/audience category) and conduct vertical stack analyses (across guaranteed, direct campaigns, PMP and open auction) to have a comprehensive picture of inventory value and avoid creating opportunity costs.

While this exercise consumes time, it’s a good investment as it will inform your PMP strategy until there is a new flavor in adtech :).

Next up is Monitoring...so keep an eye out here.

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Topics: Yield Management, data driven programmatic selling, programmatic yield, first price auction, floor pricing, Best Practices

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