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Why more advertisers and publishers are making the shift to private marketplaces

June 17, 2022

In the fast-paced advertising industry, private marketplaces (PMPs) are gaining speed. Since 2020, PMPs have shown higher rates of programmatic ad spend than the open exchange. In fact, by the end of 2022, PMPs are set to gain 17% of the total programmatic ad spend, with 13% going to the open exchange.

So why is this shift occurring? Open marketplaces have their advantages. The open marketplace is a way for publishers to maximize revenue from their inventory while minimizing their sales efforts. Buyers can reach an extensive range of impressions to efficiently deliver their campaigns and reach their KPIs.

However, the open marketplace isn’t perfect. Publishers have diminished control over the ads delivered on their sites, and advertisers don’t have the details of the inventory they are bidding on.

This murkiness limits transparency on both ends of the chain and doesn’t always fit the bill for buyers and sellers. PMPs were set up to cut through this uncertainty and help both sides gain greater control over the planning, execution and customization of their ad campaigns.

How PMPs offer more control

Compared to an open marketplace, PMPs tend to offer more control as they are open only to a selected list of buyers. Ads are bought and sold programmatically, but the invite-only environment allows for premium ad inventory to quality advertisers. Buyers and sellers validate each of their deal’s terms, creating a unique deal ID.

When inventory meets an advertiser’s needs, the advertiser can then bid and buy available impressions. Both the buyer and seller then benefit from the fact that campaigns are more efficient and the delivery inventory is more valuable.

PMPs also offer publishers more control over the advertisements and creatives that will be shown on their sites. Advertisers can easily buy premium inventory on top-tier websites and benefit from high-value delivery environments.

Another added benefit is full control over the audience and semantic targeting. According to their set KPIs, buyers know exactly what they need to buy. CPMs are much more competitive in a PMP environment because premium buyers compete for the highest quality inventory, therefore benefiting publishers as well.

In the face of a changing landscape, especially when it comes to the end of third-party cookies and privacy concerns, semantic targeting capabilities are crucial to reach the right audience in a privacy-compliant and brand-safe way. The shift towards private marketplaces may well reflect the direction the industry is going, that is to say towards a more transparent, direct, and safe model.

The private environment

In a larger sense, the overall shift towards the private environment has gained serious traction over the last few years. With more and more publishers embracing PMPs, programmatic direct, and guaranteed deals, buyers and sellers are able to both regain a sense of control. Buyers are looking to purchase more efficiently and in guaranteed, premium environments.

An indicator of the shift towards private environments and partners can be seen in Exhangewire and Equativ’s recent survey, which found that privacy requirements were ranked as significantly important in publisher decisioning to switch to a new ad server, with 28% of respondents selecting it as a driving factor.

It doesn’t stop there. With the growing threat of ad fraud (set to reach a cost of $100bn by 2023), private environments offer a viable alternative to open exchanges by making it easier to detect ad fraud and choose the buyer or seller one will do business with.

For premium players operating in a chaotic programmatic environment, brand-safety concerns have become paramount. Inappropriate ad placement can do serious damage to brands, and fraudulent or inappropriate ads on a premium publisher’s site can damage their reputation. More and more established media owners and premium brands have come to rely on PMPs to avoid brand-safety concerns.

Private environments bring buyers and sellers closer together and both sides of the auction are transparent. Players can build trust between one another and establish successful, continued relationships based on performance and transparency. Many publishers are increasingly considering this closer relationship between buyers and sellers and how premium, unique inventory may perform better and lead to better overall outcomes.

This shift towards quality, secure, and premium environments puts the focus more on context with improved ad experiences overall including benefits such as reduced fraud, improved viewability, and brand-safe placements, resulting in a better experience for the advertiser, publisher, and user.

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Publishers
PMP
private marketplace
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