The Drum caught up with Anthony Rhind, Adform’s chief strategy officer and The Drum’s digital personality of the year 2015, to discuss the growing trend towards trading media via PMP, plus his opinion that this doesn’t necessarily mean the end of open exchange based trading.
Ad tech outfits Adform and MediaMath last week announced an integration the pair hope will win-over more brand advertisers to the idea of investing in programmatic when it comes to their media budgets.
The deal enables the pair to bolster premium media inventory supply using MediaMath’s Deal Discovery tool, which provides advertisers with a centralised view of inventory available via private marketplaces (PMP) – an increasingly popular method of selling ad space among publishers.
MediaMath claims Deal Discovery lets buyers decide upon the best PMP inventory across a host of publisher environments from a centralised buying point, while Adform claims the partnership also lets advertisers execute the creative element of their campaigns more effectively across publishers’ sites.
Below Rhind discusses his outlook on what dynamics have driven the market in this direction.
The Drum: How is this deal likely to spur the use of PMPs in your opinion?
AR: PMPs emerged to support premium publishers and premium formats to be offered programmatically in a more controlled marketplace. As programmatic management evolves to be more strategic, particularly as brand budgets more, the PMP model is a logical foundation to connect environment, audience and advertisers. Accordingly, we anticipate continued growth in PMP, with guaranteed delivery, first-price replacing second-bid pricing and fixed pricing models likely to evolve.
We are already seeing a steady rise in the use of our PMPs. With the increased demand this integration will bring, we anticipate another step-change in usage as Adform high-impact programmatic formats across screens are made accessible to MediaMath customers.
The Drum: Do you see more of a preference for PMPs (or more closed trading environments at least) from the buy- or the sell-side? What are the driving factors in this shift?
AR: As mentioned, we are seeing a constant rise in the use of PMPs as both buy-side and publishers see this model of trading as a safe alternative to the I/O [insertion order] models of transacting the most premium inventory and audiences.
Both sides appreciate the mutual benefit of premium and (where desired) guaranteed structure of PMPs. Advertisers get the premium inventory they desire at prices they are happy to pay, minus the possible drama and unpredictability of open exchanges in terms of brand safety and ad fraud.
Publishers are happy as they are offering a certain percentage of their inventory for, likely, higher costs to advertisers they want to partner with. It’s a good situation for premium advertisers and premium publishers alike.
The Drum: Both sides of the industry a growing level of dissatisfaction for open exchange-based trading due to reasons of price erosion (from sell-side) to issues around inventory quality (fraud, etc.) from the buy-side. What do you think is the future for ad networks/exchanges etc. given the growing negativity towards them?
AR: I wouldn’t necessarily agree with the observation that this dissatisfaction is growing. Open exchange-based trading serves a very necessary purpose; particularly for publishers with unpredictable or excess inventory, also for advertisers less concerned with environment or indeed more standard format requirements. Certainly all those issues are very important and must be addressed if we want to continue to see marketing investment shift to digital media.
The integrity of the industry is reliant upon everyone questioning and requesting certain levels of service and standards, and that is a great thing. It’s the same with any business, or in any good business, there is constant innovation. Inevitably, certain organisations, or business models, or ways of thinking, will be improved or replaced.
There is still a definite and justified need for open exchanges at the moment, but we anticipate that technology and data will enable some of the issues to be addressed without necessary killing the open exchange model.