A Conversation with Hussain Rahim, Director of Product Marketing at PubMatic
Private marketplace (PMP) adoption continued to increase in 2015, and there are no signs of it slowing down in 2016. eMarketer estimates that PMP spending will reach $3.65 billion this year and grow 35% to a projected $4.93 billion by 2017. But like so many other fast-growing areas in digital advertising, there is some confusion that surrounds it. In order to shed some clarity on the subject, we sat down with Hussain Rahim, Director of Product Marketing at PubMatic to get some answers.
Q) What is the difference between private marketplaces and the open marketplace?
When transacting in the open marketplace (often called “open RTB”), multiple buyers are bidding on the same inventory simultaneously. However, buyers only have a certain degree of insight into where their ads will be placed and publishers can’t guarantee what brands will appear next to their content.
Private marketplace deals, on the other hand, allow a publisher and buyer to execute a negotiated deal on specific inventory bundles that run programmatically. Private marketplaces make premium publisher inventory and custom deals available to buyers programmatically that might otherwise have been restricted to direct-sold relationships. In short, PMPs provide custom, premium inventory bundles that are more transparent for advertisers.
The difference between the two marketplaces is similar to buying from Craigslist versus buying through Sotheby’s. On Craigslist, transparency is limited in that you’re not exactly sure what you’re buying and who you’re buying from. At Sotheby’s, you know exactly what you’re bidding on and guaranteed premium condition of the item.
Q) What advantages do PMPs offer media buyers and advertisers?
Private marketplaces combine all of the benefits of direct and programmatic sales into one practice. By maintaining the advantages of direct sales, buyers have access to high-quality inventory not necessarily available in the open marketplace with the transparency into what they are actually buying. In addition, they are still able to maintain their direct publisher relationships. Without sacrificing these benefits, layering in programmatic allows advertisers to enhance targeting abilities to reach audiences in real-time and integrate an automated workflow process that brings a new level of efficiency.
Another advantage of private marketplaces is access to analytics. PubMatic’s robust Analytics Premium platform provides full insight into how campaigns are performing across channels. Buyers can track all programmatic buys in one platform, and are able to understand what is working for their campaigns and what is not. Simple reporting capabilities and visibility into real-time campaign data helps advertisers make smarter media buys, adjusting campaign spend across platforms based on performance. This increased visibility also makes PMP deals an attractive option for brand campaigns.
Q) Why should buyers expand their direct relationships to include private marketplaces?
While direct buys typically offer the highest-quality inventory sourced through a personal relationship with a publisher, they do not offer the same scale as private marketplaces as they limit the buyer’s options to the inventory of an individual publisher. Private marketplaces can be executed between one buyer and one publisher, but sophisticated PMP partners are able to combine multiple PMP offers that span multiple publisher offers all under a single “Deal ID.” Under this single identifier tag, an advertiser can buy audiences and inventory across multiple publishers, significantly scaling their campaign.
For example, if a buyer is looking to fill 10 million impressions on a given campaign, they can meet this with inventory from a variety of publishers. One PMP offer may contain 5 million impressions from publisher X, another offer with 3 million impressions from publisher Y and a third with 2 million impressions from publisher Z. The buyer can then combine these 3 PMP offers into one Deal ID. The multi-pub deal ID is like a salad bar for advertisers, they can hand pick all of the ingredients –audience, format, device, inventory etc. – they want and package them into one product to purchase.
Not only does this bring greater reach, scale and targeting capabilities to buyers, it also brings a more efficient workflow process. Instead managing multiple deals and campaigns, they can track everything under one holistic multi-publisher deal ID.
Q) What are the advantages of private marketplaces on mobile and other connected devices?
More sophisticated platforms have PMP support for multiple channels and formats, such as out stream video, mobile, display, video, native and connected TV. PMP platforms that are incapable of cross-device and cross-format support severely limit the opportunities available to publishers and advertisers in private marketplaces.
Buyers working with a publisher via private marketplaces can see the publisher’s relevant inventory across devices and formats. Rather than being limited to the inventory from one platform or format, media buyers can access cross-platform and cross-device inventory bundles that meet their broader campaign goals. In a PMP environment, buyers may enter with an initial plan that is device or format specific, but because private marketplaces offer access to a publisher’s entire premium inventory, they can discover new opportunities and expand their reach with enhanced targeting capabilities that reach consumers in the ways they actually consume content.