Open Or Private Marketplace? How To Decide

We’ve continued to see private marketplaces as the preferred model for facilitating programmatic access to impressions from major publishing companies, with new announcements from the likes of Hearst, Federated Media and Condé Nast, along with many that have been in market for over the year (NBC Universal, Quadrant One, etc). However, while evaluating whether or not launching a private marketplace makes the most sense, there are three things every publisher should consider in the context of programmatic selling: relationships, data and transparency.


Both open and private exchanges use machines to handle workflow – automated buying and selling, targeting and optimization. The open model creates no conversation between the publisher and agency trading desk (ATD)/buyer, but is ultra efficient because it requires no setup. On the other hand, private marketplaces benefit from the requirement that relationships make them work -- but that also means additional work is required to transact. Open and private marketplaces act as two tools that can be used exclusively or interchangeably based on the scenario to maximize the opportunity programmatic represents.



Publishers wary of real-time bidding (RTB) can arrange private marketplace deals through discussion with specific buyers on their own terms, rather than opening their impressions for all to access. We’ve had conversations with publishers who haven’t embraced programmatic selling, but want to transact with ATDs that are new prospects that their sales team should be talking to. Publishers may be specific about whom they want to buy, and only want to transact with that short list.

Relationships are very important for private marketplaces, but publishers have to dedicate resources to enable those relationships to thrive. In many cases, buying through private marketplaces is an easier “sell” for agency clients, especially conservative ones, because of a familiar brand name and warm relationship with the seller. Marketers may view open marketplaces as risky or foreign because billions of impressions in them, and only algorithms and machines facilitate the transactions. Certain brands embrace programmatic buying only when connected directly to premium publishers they know, skipping the open market entirely. While performance and price matters to marketers, so does brand association.


Publisher first-party data can have a significant impact on ad effectiveness. With RTB, publishers increasingly worry about how they’ll control their valuable user data so they typically leave data out of their strategy. Private marketplaces address this worry because data rights can be negotiated into individual deals. If the right deal can be negotiated, data can be made available at bid time as part of the transaction or omitted if the deal terms do not satisfy the publisher’s valuation of its data. Access to data is important to the buy side, and striking the right balance between price and budget can amplify the size of opportunity for a publisher.


Some argue that impressions available in private and open marketplaces are exactly the same. This is where transparency becomes important. With the correct configuration, private and open exchanges should never contain the same inventory. Typically, a publisher will only make its unallocated impressions available on the open market in a blind or semi-blind capacity. This is done for channel protection, to mitigate having impressions available for bid in real-time while a direct sales force is also selling the same impressions. However, buying blind means neither environmental quality guarantees nor contextual relevance, which deters advertisers from spending. Our internal research shows that selling blind typically means losing up to a half of all bids.

For publishers with multiple publications and millions of impressions, it makes sense to break apart the high valued placements and sub-brands (those that are in most demand), and carve out a private marketplace around these impressions. The remaining impressions are best suited for an open exchange where a publisher can access the most demand. It’s key for different impressions to be available in different buckets to create the appropriate buy side value proposition for a private marketplace.

Publishers considering programmatic selling should speak to the buy side directly. Publisher can better assess if they can meet advertiser needs through an open marketplace, or if advertisers are better suited for transactions handled one to one in a private environment. Every publisher is different, requiring a unique approach to maximize success.

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