Commentary

How To Evaluate Private Programmatic Deals

I have written before about how programmatic private deals work. But the real question is: Are they worth it, and what’s required for a private deal to make sense?

To get the most out of private deals, a marketer needs to have the right team with the right tools. Here’s what that looks like in practice:

--       A team of media buyers who can successfully negotiate the rates and terms of the deals.

--       A demand-side platform (DSP) that can integrate with the sources of the deals.

--       A data management platform (DMP) that can hold all of the media data and audience data for analysis.

--      An analytics team that knows how to use data to evaluate the deals.

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Assuming you’ve been around the programmatic block once or twice before, chances are you’ve got the first three covered. So let’s focus on the fourth: deal evaluation. If you don’t know how to assess a deal’s value, there’s really no point doing it. The good news is that there are almost countless ways to approach evaluation, which can help marketers weigh the pros and cons of private deals. Here are the four evaluation methods I’ve found to be most effective:

Audience indexing: An audience-indexing analysis compares deals based on the audience mix present. Comparing publishers’ specific observed audience mix with a generalized “all sources” audience mix provides a way to differentiate between deals. This indexing can also feed into media dashboards, where differences in audience lifetime value enable marketers to compare deals based on expected value metrics rather than simple CPA.

Deal overlap: Examining the overlap of audiences between multiple deals is critical. Deals with highly overlapping audiences can be opportunities to reinforce messaging, or a chance to optimize to the lower-priced inventory. Digging into the overlapped audience can also reveal information about how content and context affect campaign KPIs.

Competition-reduction analysis: High levels of competition in real-time bidding mean a greater chance that there will be dense bidding around common audiences, especially for high-quality audiences that may fall into multiple very attractive behavioral or retargeting groups. Comparing winning bid prices between private deals and the open market can reveal situations in which private deals create a significant reduction in competition. First-look and low-bid density private auctions can often lower the average price paid for a desirable audience.

Funnel analysis: Funnel analysis examines how effective a private deal is at driving qualified consumers through the purchase funnel. Private deals may influence a consumer’s upper-funnel stages, but last-touch attribution methods will assign credit to lower-funnel tactics such as search or remarketing. Relying on simple CPA or CTR metrics can mask the upper-funnel effects of private deals, and this often leads to damaging changes to private deals in the search for low-funnel efficiency. Even when an overall campaign is measured based on last-touch methods, smarter use of upper-funnel tactics such as private deals for inventory evaluation and budgeting can result in superior performance overall.

So are programmatic private deals right for you? Only you can answer that question -- and now you have the tools to find out.

1 comment about "How To Evaluate Private Programmatic Deals".
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  1. Jason Burke from clypd, Inc, February 17, 2015 at 7:03 p.m.

    Max, good piece. A similar piece could be written for the matching puzzle piece: evaluation and negotiation of private deal RFPs by the supply side. Similar tools required, but ones focused on the goals of the media owner. Only way these strategies work at scale is when both sides have the appropriate weapons in their arsenals

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