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Make a Deal: How and Why to Get Into the Private Display Marketplace

Published: June 2, 2014

Author: Molly Shotwell

Everyone is talking about programmatic buying in the display world.  Buzzwords like RTB, programmatic premium, real-time marketing, private marketplace, deal id, etc., are thrown around daily.  It can be a lot to take in and understand, so I’ll focus on one portion today.  Let’s talk about one of these elements that is continuing to be a larger part of our programmatic buying strategies: private marketplace deals.
Premium publishers like LinkedIn, Yahoo, CondeNast, and many others are making their inventory available in smaller private auctions.  There are a couple of good reasons to pursue these: 1) you could be interested in a particular targeted segment of a site, e.g. users with a title of Director or above on LinkedIn; or 2) you’ve already seen strong results on a particular site with prospecting or contextual campaigns, and you want to target that site (or an audience subsection).
In either case, you’d reach out to the publisher and see what their private marketplace deal rate is for that segment.  It is generally going to be less expensive than a direct buy and less of a commitment (i.e. no signing of an IO) but more expensive than if I were to bid on their site in the open marketplace.  By negotiating into the private auction, I know that I am getting the audience that works for me as well as a bit of a higher priority in the auction.
There are two types of deals that can be negotiated: floor-rate CPM and fixed-rate CPM.  In a floor-rate CPM deal, you are given a floor rate that is the minimum you must bid to be considered in the auction.  For the fixed-rate CPM deal, you are given a fixed rate that you will be charged no matter what the bid is.  In the fixed-rate CPM model, the CPM is generally higher than the floor model as the publisher will give this deal a higher priority than a floor-rate CPM deal.  It is good to ask the publisher the general clearing bid on a floor CPM deal.  This gives you a good idea as to what CPMs you can expect to pay.  A lot of these deals are fairly new and have few advertisers keeping the clearing bids very close to the floor CPM.  Of course, as competition increases, these CPMs will go up.
Once you have agreed upon the price and made the deal, the publisher will give you a deal id to plug into your DSP to target that inventory.  The deal ID allows the publisher to control the inventory that you are bidding on.  Note that you will need a seat on the ad exchange the publisher uses to sell their supply; in most cases you can use the seat held by your DSP.
So, if you’re ready to roll on a private marketplace deal, reach out to the publisher and see if they participate.  You may want to test different audience segments on the site to find out what performs the best; if the site is smaller, a run-of-site buy can be sufficient.
Let me know what deals you ‘ve made recently!

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