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Why the Private Marketplace is on the Rise

Dorine Klapholz
Senior Programmatic Manager
 
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Who doesn’t get a thrill from an exclusive, invite-only party? You made the cut. And you benefit from all the perks that go along with that. The same is true when you’re buying and selling ad space on a private marketplace. No matter if you’re a buyer or seller, you get the best selection, deals, and more. And here’s an explanation of all those perks:

Public vs. Private Marketplace

Let’s start with the basics. There are two main transaction methods within a programmatic ad exchange: Public and Private. Now let’s take one step backwards. Just in case you’re still new to programmatic, we’re talking about a digital ecosystem that facilitates the buying and selling of ad space. So within that ecosystem, the buying and selling happens in a public or private marketplace.

The public marketplace requires little-to-no contact between the buyer and seller. It’s pretty straight forward: An auction occurs and the highest bidder wins according to the buyer and seller’s general requirements, often based on category, size, geography, domain, floor rate, and so on.

But this isn’t the case for the private marketplace. Here buyers and sellers participate privately on an “invite-only” basis, which in most cases entails an ongoing partnership between the two. The advantage here is that both the buyer and seller can create tailor-made deals that best fit their needs. For example, this can range  from a deal targeting an entire country to one that specifically targets burger-loving male college students in Wisconsin.

The Rise and Success of the Private Marketplace

The private marketplace is on the rise. Its success is due in part to a critical element that’s missing from the public marketplace: control.

Sellers enjoy the best of both worlds. As a seller, even if you choose to close a deal with a specific buyer on your inventory and the buyer doesn’t want to bid on an impression, that impression automatically moves from the private marketplace to the public marketplace.

And as a buyer, in addition to receiving first-look access to sellers’ inventory, you’re able to close private deals with sellers and in some cases get your hands on premium inventory that would otherwise be unavailable in the public marketplace.

Sounds great? Just wait, it gets even better. Recently, a third transaction method has surfaced. It’s called Programmatic Direct. It’s equivalent to guaranteed sales, but on a programmatic platform. It allows buyers and sellers to take the private marketplace one step further – letting them make transactions in advance on guaranteed impressions.

How is this different from any other private marketplace? In one big way: In a private marketplace, buyers and sellers don’t commit to a certain volume – only a specific rate.

The Future of Programmatic Advertising

Today, there are plenty of statistics that show the growth of the private marketplace. For instance, according to ExchangeWire, “In the US, ad spend in private marketplaces is set to grow 30.9% year-on-year to $3bn in 2016 – accounting for 28% of RTB digital ad spend.”

Too good to be true? It’s not. You can see these stats reflected in Matomy’s very own private marketplace. In 2015 alone, Matomy’s display activity in the private marketplace grew significantly from the previous year.

If in the past, buyers and sellers needed to be convinced to transact programmatically, now it’s a no-brainer since it provides them with access to more customized transaction methods. At the moment, the public marketplace still remains the dominant force for programmatic advertising, but private marketplace and programmatic direct transaction methods will continue to rise in popularity, considering they offer an exclusive and more personalized approach to auction-based buying.

As for Matomy, we’ve already put a large focus on increasing our activity in the private realm – especially with our latest acquisitions of MobFox and Optimatic. And we’re not alone. There’s been plenty of talk in the field of developing more programmatic transaction methods, such as offering new methods that combine  programmatic guaranteed and header bidding.

In other words, it’s an exciting time for programmatic.

 

Interested in hearing more? Get in touch with our Programmatic Partnerships Team at trading_prog@matomy.com.

For more information on Matomy’s Display PMP Packages: http://www.matomy.com/pmppackages/

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