Commentary

The Rise of Private Marketplaces In Digital Video Advertising

Private marketplace is the latest confusing term to come out of the ad tech space, which seems to delight in buzzwords, acronyms and complex explanations. Depending on whom you ask, this broad concept may be referred to as private marketplace, private exchange, publisher-direct, programmatic direct, programmatic premium, Deal ID or any other number of monikers.

The term I prefer, private marketplace, gives demand and supply partners the ability to transact video advertising programmatically, in a direct, invitation-only technology platform. In reality, many of the other terms you’re hearing are either an alternate definition of the same thing or a subset of private marketplace.

So why did this trend that started in display move to video?

Let’s be honest. Premium publishers have historically been reluctant to expose their crown jewels -- digital video inventory -- transparently into video exchanges and platforms. Some of the reasons have typically included:

1)    concern over sales channel conflict;

2)    worry about the commoditization of their highest CPM inventory; and

3)    fear of programmatic in general. 

Private marketplaces solve all of these issues for premium publishers and make it safe to go into the water. As more and more advertisers develop and expand programmatic-only budgets, publishers are pursuing private marketplaces in order to access these budgets.

Advertisers are using private marketplaces for several reasons: to more fully leverage programmatic technology across all of their video ad buys, to consolidate video ad buys onto one platform, and to improve efficiencies. Private marketplaces combine the capabilities digital advertisers have been using in display and long tail video with premium video inventory. Advertisers negotiate for a set of inventory combined with unique data sets, and for this privilege, they will pay a premium. This allows advertisers to consolidate disparate video inventory sources, premium and regular, in one place for holistic campaign planning and optimization.

Publishers also have a lot to gain from private marketplaces. They gain efficiency by selling premium video via automated platforms, instead of cumbersome insertion orders, while controlling which buyers access their inventory and at what price. Publishers can use analytics-driven platforms to get new insights into buyer and sales trends, demand, and pricing across all inventory levels. The higher CPMs that publishers can achieve versus general exchange pricing make private marketplaces very compelling.

In a world where billions of digital ad impressions are bought and sold via automated platforms every day, the fact publishers and advertisers are still using insertion orders, phone calls, and faxes to buy premium inventory is nothing short of incredible. Private marketplaces, whatever you call them, are a win-win for video advertising buyers and sellers.

1 comment about "The Rise of Private Marketplaces In Digital Video Advertising".
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  1. Jay Singh from ViralGains, April 22, 2014 at 3:39 p.m.

    Certainly a positive trend. Invite only works because premium publishers seem to want premium advertisers. The Google Display Network seems to have re-written those rules by allowing most any advertiser to appear on most any publisher. What are examples of the private marketplaces for digital video?

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