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A guide to programmatic deal types

In the programmatic ecosystem there are several different ways of offering and acquiring inventory in real time. Probably the most popular method of buying and selling advertising inventory is through so-called programmatic deals, which have streamlined the process and allow for more efficient transactions and better targeting options.

The main ways of these deals are open auctions, private exchanges and programmatic guaranteed deals. Each of these programmatic deals offer their own unique benefits. In this blogpost we’ll review all of them and explain the differences to help you choose the best option for your programmatic advertising strategy or monetization plan. 

1. The OpenMarket


The open market is also known as an open ad exchange, where digital ad placements are bought and sold as part of an auction. As the name suggests this auction is open to all. All marketers on the exchange, SSP or ad network have the opportunity to bid on all available publisher inventory. The auction is run through real-time bidding which enables inventory prices to be decided in realtime. Publishers can set the floor price for an ad, but the marketer demand still determines the final price and the highest bid wins.

Pros

+ Easy, inclusive, affordable: It’s a marketplace for publishers and advertisers of all sizes. Anyone can take part.

+ Wide demand pool: Publishers have access to the widest range of advertisers and vice versa.

+ Control: All parties have full control over the floor price, audience targeting and more.

Cons

- No revenue guarantee: There’s no guarantee of ad units sold or the price they sell at for publishers.

- Drop in CPMs: Advertisers have more power, which spells out lower CPMs for publishers.

- Lack of brand safety: Publishers don’t get much control over who’s buying their inventory.

 

2. Private Marketplaces (PMP) 

Private marketplaces are also known as private exchange, private auctions or invitation-only auctions. All these different names for the same thing already give as an indication of what the whole thing is about. It is another form of real-time bidding, but instead of being open to all marketers and all publishers, a single publisher or on our case a single SSP, invites just a handful of selected advertisers to participate in the auction for his premium ad inventory. This ad space is usually the best a publisher has available and is therefore only offered to an exclusive, limited audience. The private auctions start with a floor price set by the publisher, and the bidding starts there. As in the open auction the highest bid wins.

Pros

+ Exclusive, transparent and qualitative: Publishers have full control over who has access to their premium inventory, marketers get access to the best placements and both get  clear insight into what kind of inventory the deal is about.

+ Automated process: Publishers just have to identify the advertisers they want to pitch their inventory to, the rest of the process is automated between DSPs and SSPs.

+ Better revenue potential and relations: As publishers are able to set their own floor price their revenue potential is higher. By negotiating terms and conditions of the deal, the relation between publisher and advertiser is improved.

Cons

- Unclear value of inventory: Publishers that don't emphasize the benefits of their premium inventory could be selling themselves short. 

3.Programmatic Guaranteed Deals



This deal is also known as a guaranteed buy, a programmatic direct or an automated guaranteed and it is quite similar to regular media buying as it unfolds in an one-to-one relationship between the advertiser and publisher. At a fixed price the publisher offers specific, reserved inventory to the advertiser and together they negotiate a price for a guaranteed volume of impressions or a flight date.

Pros

+ Control: The inventory and creative that will be sold and used is decided about by both parties.

+ Guaranteed revenue: The advertisers buy inventory at a price set by the publisher.

+ Automation: Everything happening after the setup is automated, eliminating human errors.

Cons

- A lot of work: The process is automated, but to set up the deals publishers need to locate advertisers, pitch their premium inventory, negotiate the deal, …

- Volume control: There’s a chance of under-delivering.

Why you should go for Private Marketplaces

All types of programmatic deals come with the benefits and efficiency of programmatic. And as we already told you in the beginning of this blog post, choosing between them will ultimately always depend on your campaign goals and budget. 

Setting up a PMP: It’s just so easy! You only have to manage one deal rather than multiple deals. Last but definitely not least: Private marketplaces with fewer bid requests are a lot more eco-friendlier than the open market.

Any questions? Not sure what to do or ready to get started with PMPs? Either way, at ConnectAd we are here for you. Let’s talk!