PMPs in the era of new age programmatic

Text: Amit Yadav, director, advertiser solutions, PubMatic

Programmatic spend across Asia Pacific has grown exponentially in the past couple of years. So much so that Boston Consulting Group estimates that programmatic’s share of digital ad spend will increase from 19% in 2017 to 36% in 2020.

This indicates a shift in perceptions of the programmatic ecosystem, particularly amongst buyers who increasingly see programmatic as a mainstream means of transaction rather than just tech to buy remnant inventory. With considerable improvements in transparency and brand safety tools, buyers are gaining confidence in programmatic buying. PubMatic has long been at the forefront of the move to clean up the programmatic ecosystem—we are committed to providing transparency and ROI for both our buy and sell side partners.

As the benefits of programmatic become more accepted industry wide, the debate has shifted from the relevance of programmatic to the optimal way of transacting programmatically. Though the Open Marketplace (OMP) has traditionally been the most popular channel for delivering programmatic campaigns, private marketplace (PMP) deals have fast gained traction. These deals help traders access premium inventory pools across one/multiple publishers at higher priorities on SSP/publisher’s servers. Deciding on a definition of a PMP is in itself difficult as there are so many iterations: standard PMP, Programmatic Preferred and Programmatic Guaranteed being the most popular. Let’s explore each one of them and see where and how they fit into a buyer’s media plan.

Standard PMP or Private Auction (PA deals)

With standard PMPs a seller makes an offer of a portion of non-guaranteed inventory to specific buyers at an agreed minimum price (floor price). The inventory is sold at an auction to the highest bid above the floor. If there is no bid above the floor, the inventory becomes available to open market. If a standard PMP has a higher priority than open market then a bid of $2 in PMP will win over a bid of $3 in open market due to the priority. Standard PMP auctions are not exclusive. There can be multiple buyers bidding in a private auction. Most always on deals are part of this category.

How does it help buyers?
- Buyers know exactly where their ads will run as site lists are pre-agreed
- As it is non-guaranteed, buyers can layer their own audience targeting onto these deals
- CPMs are generally lower than other types of PMP
- They can be used for both branding and performance campaigns

What should buyers be aware of?
- Win rates are generally lower because of increased competition vs other types of PMP
- Scale can be an issue as these deals are set at a lower priority than other PMPs or direct sold in the publishers ad server

PMP Preferred or Fixed Price PMP

PMP Preferred is a special type of deal that enables buyers to get preferred access to pre-agreed inventory. This means they can purchase the inventory with less competition from other buyers.

There are a few ways this differs from a standard PMP deal:
- These deals are mapped to only one buyer from a specific DSP
- CPMs are fixed and can be higher than OMP/standard PMP deals
- Priority is higher than OMP or standard PMP

How does it help buyers?
- Buyers know exactly where their ads will run as site lists are pre-agreed
- As it is non-guaranteed, buyers can layer their own audience targeting onto these deals
- Less competition means better win rates than with standard PMPs and OMP
- Prioritised set up means buyers get access to better inventory quality in terms of viewability and scale

What should buyers be aware of?
- Set up can take a long time because these deals require one to one conversations with publishers
- Some publishers may expect spend commitments
- eCPMs can be higher than standard PMP and OMP

PMP Guaranteed or Programmatic Guaranteed (PG)

In guaranteed deals both publishers and buyers agree to specific delivery parameters up front committing inventory and spends respectively. Always executed at fixed price, these deals require accurate forecasting on the part of the publisher and buyer. Based on availability of a required audience (i.e. the volume of impressions they can deliver against a certain audience), the buyer commits spend. These deals are generally the highest priority on the publisher ad server (other than sponsorship) to ensure that the buyer can win every impression. Campaigns are paced to ensure the correct number of impressions are delivered in the agreed time frame.

How does it help buyers?
- Like direct IO campaigns, buyers know exactly when and where their ads will run and at what frequency, making this an ideal way to run brand campaigns
- Guaranteed spends ensure accurate allocation of campaign budgets
- Highest priority means great inventory quality

What should buyers be aware of?
- Buyers need to be fully reliant on the publisher to control the targeting and inventory—they cannot layer on their own audiences
- eCPMs may be higher than other PMPs or OMP

It is clear that the various types of PMP deals available offer buyers many advantages—from improved inventory quality to cost efficiency. In order to fully reap the benefits of these deals, buyers need to be confident that they’re working with a knowledgeable supply partner who can offer the right support in terms of set up, optimisation and real time trouble shooting. With a strong supply partner, buyers would be able to access all types of inventory and ensure all digital buys see the efficiency of automation.