Commentary

The Right Prescription For PMP Pain

The growth of private marketplace (PMP, aka programmatic direct) activity as a percentage of overall programmatic and digital spending is undeniable. eMarketer forecasts that programmatic direct activity will account for $18.2 billion, or over 56% of all programmatic ad spending in 2017. 

The continued rise of PMPs are being spurred by two parallel advantages over the open market:

Creative executions from known and reputable advertisers for publishers in exchange for known and safe environments for buyers
Unique offering from publishers, in the form of audiences, content and ad units, unavailable to buyers in the “bring your own data” world of open auctions in exchange for higher cpms

Yet for all the buzz, many publishers are experiencing more PMP pain than dollars at this point.  

But before we can treat the pain, let’s look closer at the symptoms. First off:  PMPs can take several forms.  At the low end, the “private auction" is nothing more than a private auction for one or several pre-approved buyers.  At the high end — automated guaranteed or programmatic reserved —  the PMP more closely resembles a direct/IO deal involving the guarantee of price and inventory with one buyer.  While many see programmatic guaranteed as the future, it currently only accounts for less than 10% of all programmatic activity.

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The Symptoms

The real pain is currently being felt in unreserved fixed rate or preferred deals where a minimum CPM floor is established, but no inventory is guaranteed.  Even though there are no revenue guarantees, publishers still enter these transactions with expectations — if not estimates — that dollars will be material, and worth the effort. For many publishers, the juice is worth the squeeze for setting up these types of deals, in driving significant — and in many cases, incremental revenue — from their standard direct/IO efforts.

For others however, it has been an exercise of frustration and perplexity.  After the back and forth with their trading desk contact, negotiation of terms, coordination with their supplier-side platform of choice and setting up the Deal ID, the hope of daily digital dollars a day results in programmatic pennies,  

The Causes:

So what is causing this headache?  Why isn’t your PMP deal performing? Beyond the full checklist of technical reasons available through the Interactive Advertising Bureau, at http://www.iab.com/wp-content/uploads/2015/10/PMP_Checklist_Final.pdf we are finding that there are two frequent causes:

Pricing: If your PMP deal has a CPM priced far below other PMP activity, then priority will dictate that the other transactions are served first.

Inventory Overexposure: If a buyer can get that same inventory from many other demand sources, what is the value in setting up a private deal with you?

The Prescriptions:

Check-Ups:  As they, say an ounce of prevention . . .Your PMP along with your other programmatic efforts should be regularly, if not constantly, monitored.

The Potential Nuclear Scenario:

Whitelisting: Some publishers are starting to consider advertiser whitelists in the open market to ensure ad quality.  Similarly, brands, have been implementing property/domain whitelists to limit the display of their open narket ads to known and trusted publishers.  Thus, if the other PMP ills are not fixed, especially with publishers offering unique products unavailable in the open market, open market whitelisting has the potential to supplant PMPs.


We are huge advocates of PMPs and believe they represent the future of programmatic advertising across all platforms.  Spending should continue to evolve out of the open market, but it’s still early days.

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