Private Marketplace (PMP) is one of the terms that dominated the ad tech industry over the last couple of years.
PMPs created such a buzz because they bring together the best out of Direct Deals and Programmatic both for publishers (app developers) as well as advertisers.
In this post we will see the reasons why all publishers should try to sell their traffic through a PMP as soon as possible.
1. Steady ad revenue stream without the need for sales team
Until now, in order to secure a steady revenue stream, a publisher would need to close deals directly with an advertiser. Those deals are scarce, time consuming to be negotiated and end up having a lot of complications. This is why usually sales people are involved, so that developers can focus on improving their apps rather than solving the complications that those deals create.
Private Marketplaces (PMPs) as a programmatic way of handling ad traffic, provide all the necessary automations which make the need for sales teams obsolete.
Moreover, advertisers seek PMPs in order to scale on them and this in turn allows easy revenue projections and steady revenue streams for the publishers.
2. Maximize ad revenue by selling the inventory in a premium price
Reports from the adtech industry mention that in Q2 2016 the average eCPM in PMPs was 200% higher than the average eCPM in Open Auction.*
This happens because PMPs offer a series of additional benefits for which the advertisers are eager to pay a premium price.
First of all, PMPs give the ability to advertisers to surpass an auction and get guaranteed first-look impressions for the apps that they choose and fit for their campaigns. Moreover, advertisers can use first-party audience data provided from the publishers, and adjust their bidding activity accordingly.
3. Maximize Fill rate without discounting the price
Direct Deals are an easy way of maximizing the Fill Rate because all the traffic generated from the publisher will be filled through the deal.
However, this is inefficient for the publisher who will be paid the same amount of money regardless the traffic that the app generated.
PMPs offer a much more effective way to increase Fill Rate. With a PMP deal a publisher can serve the agreed amount of traffic to the advertiser with whom he created the deal, and then serve the remnant traffic to the rest of the advertisers in the Open Auction.
Budgets are moving there
Private Marketplaces are currently fueling the growth of Programmatic Advertising budgets.
Google reports that advertisers view PMPs as an entry to the programmatic world, because the concept is much closer to the traditional media buying compared to the Open Auction.*
The value of the actual growth of PMP varies through the different exchanges, geographies and ad format but all reports agree that it is growing by more than 20% Year Over Year* with some projections attributing PMP as 40% of the overall programmatic traffic by 2020*