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Private Marketplaces: What Are They And Why Are They Important?

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In the context of digital advertising, a private marketplace is quite simply a direct deal between an individual publisher and a buyer, executed and automated through the real-time bidding (RTB) protocol.
The ‘marketplace’ part is where priority access for an advertiser is combined with a preferred pricing floor, essentially overriding the usual ‘open RTB’ auction. The priority access which the publisher grants the advertiser could be either truly private (meaning one and only one buyer can access that specific segment or site inventory), or if not private, it may be set up on either a preferred floor price or first right of refusal basis.
Why Agencies Are Driving Private Marketplace Adoption
In Europe and Asia Pacific we have seen very rapid adoption of private marketplaces across the industry, which is due to a number of factors.
On the agency side, the drive for greater efficiency, transparency, control, and effective targeting are all pushing buyers to innovate in an attempt to draw more brand budgets into this space.
Publishers are taking notice, and the savviest are beginning to realise that if budgets are flowing into programmatic environments where a premium sales team can’t access them, there is a big incentive to get involved and craft a strategy around them.
Private marketplace buying creates clear value for the advertiser, providing access to premium inventory and targeted audiences. If executed correctly, the return for the publisher should also make exposing their inventory in this way well worth their while.
As more budget and higher yield brand budgets move into programmatic buying environments, it will be more important - not less important - for agencies to manage their businesses with a given publisher across ALL sales channels in a coordinated manner.
The products used to execute these deals should empower buyers to strike private marketplace deals, seamlessly including audience data to drive higher CPMs, and even allowing buyers to suggest proposals through digital RFP functionality, ultimately bringing the Excel and fax trading methods of old firmly up to date.
Thankfully, the more the media trading world seems to change, the more certain things remain the same: face-to-face events remain of utmost importance, and one of the best ways to forge private marketplaces in a short space of time.
Face-To-Face And Trading Relationships
Put simply, face-to-face meetings and events are still vital because buyers still need to understand fully each publisher, their strategy, their audience, and the people who run them. And vice versa. Even when machines are automating deals on an impression level, the need for people talking to people, striking deals and negotiating partnerships will never go away.
We recommend that agencies and brands consider private marketplaces within the context of an overall sales strategy that reflects all possible channels - especially, but not limited to, direct sales - to most effectively monetise inventory. To give one brief example, private marketplaces are an ideal way for buyers to gain preferential access to a premium segment of inventory, as part of a wider, cross-media campaign.
Managed with a complete and strategic view of trading relationships in mind, private marketplaces will prove to be a major buying channel in the future.