Part 1 of a 3 part series on fixing Private Marketplaces (PMP). Part 1 will overview what’s wrong with private marketplaces, Part 2 will focus on the keys to getting PMP working right, Part 3 will focus on post-launch success factors.
What’s wrong with PMPs?
Private marketplaces (PMPs) were supposed to bring together the best of two worlds: the transparent, (almost) guaranteed and media planning-friendly transactions inherited from traditional direct sales, combined with the operational efficiency and targeting capabilities of programmatic. Sounded like the missing link between direct and RTB, right?
But looking at the data (share of total programmatic revenue, fill rate, number of deals), opinions about the efficacy of PMP are mixed at best. Private marketplaces haven’t met the (very) high expectations around them. Here are a few operational areas that contribute to PMP underperformance:
Lack of a clear conceptual framework:
Clear definitions and best practices are not yet established for private marketplaces. In the old world, an I/O implied a guaranteed agreement by both buyer and seller. Originally in the programmatic world, price was the only real factor (along with cookie matching). However, with PMP’s you have “private marketplace”, “preferred”, “fixed-price”, “private deals” or “public deals”, “first view” or “first look”; the variety of definitions and the nuanced differences each term represents to the user feeds the confusion that exists for both sellers and buyers. This cloudy nomenclature also indicates a much deeper complexity that is lightly understood today.
When a buyer is entering a PMP, will he be competing with all open auction bidders? Will he be alone or competing with some happy few? These unknowns affect strategies and, as a result, impact liquidity.
Additionally, sellers seem confused when it comes to choosing the right option for a given use case. Suffice it to say that there is an obvious need for the standardization that the IAB is working on today to create consistency and transparency for both sell and buy-sides. However, simplification is also needed.
Alignment: Media sellers don’t meet buyers’ needs
PMPs were primarily introduced to enhance transparency and predictability for both buyer and seller. Yet when looking at deals single-digit fill rates, it seems that PMPs – as they are often used today – provide neither transparency nor predictability.
The key here is transparency. If sellers want their deals to be a success and reach decent KPIs, they have to work with their buyers to understand the following:
- What is the buyer targeting (content, audience, frequency come to mind here)? And what are their budget/volume constraints?
- Assessment of the value and quantity of the publisher’s supply available to offer relevant, appropriate-sized packages that will fulfill the needs of an audience buying plan.
- Simultaneously, sellers need to provide a realistic forecast of availability.
The above should remind us that even if PMPs are happening inside a programmatic framework, they often still require a human-to-human discussion between a seller and a buyer. Buyer and seller need to work together to share data where appropriate so that the seller can package inventory for the buyer. This conversation again puts the onus on the seller to have command of their programmatic trading data to easily discover and price deals and provide accurate insight to engage in the aforementioned dialogue. Without using such tools, sellers are blind and cannot confidently discover or price deals that will help shape the overall yield on inventory.
Monitoring and Measuring Deals: Buyers and sellers are blind when it comes to analysis and troubleshooting PMPs
Let’s say a deal is struck between a seller and a buyer. Is there enough supply made available using the Deal ID? Is the buyer actually bidding with the campaign and creatives that were agreed upon, at the price negotiated? Is there any conflict with another existing deal, or with ad quality settings? Is the – soft – commitment in volume or spend being respected by the buy-side? Last but not least, is my deal actually performing in terms of CPM or revenue?
It seems right to say that a seller should be able to answer all these questions. But in reality, PMP sellers are under-equipped and acquiesce to buyers’ decisions and bidding behavior to keep the relationship, preventing them from striking efficient and profitable deals. Until recently, this “seller blindness” was acceptable, as most of the technology investment has been on the buy-side. However, this has changed with programmatic seller tools like Adomik Bid Analyzer and Adomik Deal Maker available in the market.