PMP Programmatic: How Private Marketplaces Maximize Value for Publishers and Advertisers

The world of programmatic advertising is diverse and not limited by real-time auctions. Other valuable options include programmatic guaranteed, programmatic direct, and PMP (private marketplace). In this article, we’ll explore all these concepts while emphasizing the PMP programmatic meaning.

Every advertiser wants more control over their ads, and every publisher aspires to maximize their revenue. We’ll explain how private marketplaces can help both reach their goals and create a win-win solution. We’ll also compare PMP with programmatic direct and programmatic guaranteed so that you can make an informed decision on what approach to try.

What Are the Main Types of Programmatic Deals?

Digital advertising has existed since the 1990s, but the programmatic approach truly took the idea of capitalizing on ads to the next level. Before its appearance, deals between advertisers and publishers had to be made manually, the price models weren’t transparent, and the whole process was time-consuming.

Today, we live in a completely different world. With programmatic systems, advertisers can watch ad performance in real-time and optimize it, and publishers can adjust their ad inventory to get more revenue. Typically, advertisers use demand-side platforms (DSPs), and publishers utilize the benefits of supply-side platforms (SSPs). Through these platforms, both parties connect to open auctions on so-called ad exchanges. This is the first type of programmatic deals.

1. Open auctions (or open marketplaces) rely on real-time bidding (RTB) technology. This means all potential advertisers place their bids on ad inventory offered by a publisher, and the owner of the highest bid gets to show their ad to a publisher’s website visitor. The open auction starts automatically and takes milliseconds.

The most significant advantage of open auctions is their broad reach, as they provide access to a vast number of ad inventory belonging to different publishers. Here are some other benefits:

• Sometimes, their CPMs (Cost Per Mille) are lower than other digital advertising options (for instance, private marketplaces).
• Often, there are no minimum spending limits.
• There’s an opportunity to find an undervalued ad inventory and get great results for little money.

2. Private marketplaces (PMPs). The second type of programmatic deals is the central concept of this article. A private marketplace relies on auctions, too, but in this case, the auctions are invitations-only and provide access to premium inventory. They also happen in real-time, the same as open auctions. Here are some of the benefits of PMPs:

• Private auctions have higher priority than open auctions on ad servers.
• Private auctions are more transparent: all advertisers and publishers can be identified.
• Fraud is less likely than on open auctions, and user data is more secure.

3. Preferred deals (also known as programmatic non-guaranteed). They are made between one publisher and one advertiser, but it’s not the only distinctive feature of this type. Imagine that you can see some valuable object you’d like to buy before everyone else, and you have an opportunity to call dibs before it goes to the auction. Same here: a publisher offers the premium ad inventory, and for a fixed CPM price, advertisers can buy priority access to it before private and open auctions start. At the same time, a publisher can’t guarantee their inventory will be available whenever an advertiser needs it.

The advantages of this option are:

• Preferred deals typically allow access to highly relevant audiences.
• For publishers, preferred deals present a way to obtain more control over the ads appearing on their websites (they can review campaigns beforehand).
• Advertisers aren’t obliged to buy the ad placement – by paying a fixed price, they ensure priority bidding for themselves, that’s all.

4. Programmatic guaranteed. Like preferred deals, this approach isn’t based on auctions. Unlike preferred deals, the inventory is guaranteed. Actually, the price and the inventory are discussed between a publisher and an advertiser and get fixed.

This approach may remind you of ad buying in the before-programmatic era, but now the whole process is performed through specialized platforms and at least partially automated. Its advantages include:

• More control over revenue for publishers (since the price is fixed) and over the ad inventory for advertisers (since it’s guaranteed).
• Advertisers can access the premium inventory that can’t be reached through auctions.
• This approach is the only one among four that guarantees impressions.

As you may have noticed, the first two types are auction-based and involve multiple participants, while the next two don’t rely on auctions and involve only two sides of the deal.

All the types of programmatic deals described have pros and cons. Let’s discuss them in detail and compare different options.

What Is a PMP?

A private marketplace (PMP) is a platform that supports invitation-only auctions for advertisers willing to bid on premium ad inventory. The PMP programmatic model combines the advantages of modern digital advertising technologies with the benefits of direct deals.

In PMP deals programmatic approach presents its best features: speed, efficiency, and increased control. For example, the environment of private marketplaces is more controlled compared to open auctions, both for advertisers and publishers. The first ones can access premium ad inventory and gain a deeper understanding of the resources where their ads will appear. For publishers, PMPs present opportunities to control the quality of ads on their websites.

So, if a marketer wants their ads on a website like The New York Times, a PMP is most likely the go-to place. What makes PMPs so special? First of all, every deal must have a unique ID. It’s used to identify a buyer and a seller.

Second, PMPs not only provide access to exclusive ad inventory but also allow customization of deals, e.g., tailoring them to advertisers’ needs.

To summarize the PMP programmatic meaning, this model helps publishers and advertisers have a more direct and transparent connection while utilizing the benefits of automated ad buying. Not surprising that private marketplaces have become an essential part of the programmatic ecosystem.

How Do PMPs Work?

Typically, the PMP programmatic process consists of these steps:

1. 1. The publisher invites buyers or ad agencies to participate in a private auction and negotiates ad inventory, pricing, and targeting options with them.
2. 2. The publisher generated the deal ID. Invited advertisers will use it to access the ad inventory and bidding.
3. 3. Advertisers connect to the PMP via their demand-side platforms and place their bids on the inventory.
4. 4. The highest bid wins, and the ad is served to the publisher’s website visitors.

The private auction looks a lot like an open auction. The main difference is the number of advertisers participating in it. Still, despite lower competition, the price for ad placement may be even higher than on open auctions. The reason is apparent: premium inventory costs more.

Pros and Cons of Private Marketplaces

To get the complete picture, let’s look at PMPs from both sides. First, we’ll discuss the reasons to try them, but like any technology, PMPs have their drawbacks. Here is a concise picture with all the benefits of pmp and some challenges you should be prepared for:

So, a private marketplace is a viable option for publishers and advertisers that value quality and control. But before jumping to conclusions, let’s delve into other options and compare them.

What Is Programmatic Guaranteed?

As we stated above, programmatic guaranteed refers to deals made between one publisher and one advertiser about the guaranteed number of impressions for a fixed price. What else should you know about it?

• These deals have the highest ad server priority.
• Ad inventory is exclusive, premium quality.
• Since deals are made directly between a publisher and an advertiser, there’s no room for fraud.
• Both sides have more control: publishers can review creatives, and advertisers check the ad placements.
• Programmatic guaranteed allows publishers to establish strong relationships with advertisers, which leads to higher revenue in the long term.

Still, there are some risks in making deals this way. For example, advertisers commit to a certain budget and must spend it even if ad performance isn’t as good as expected. Also, buyers may miss interesting placement opportunities available on open auctions. For publishers, there’s always a risk of underpricing, hence, less profit.

Now that you know quite a lot about this type of deals, it’s time to start comparing options: programmatic guaranteed vs PMP.

PMP vs Programmatic Guaranteed: What’s Best?

While both options usually provide access to premium inventory, each has its pros and cons. The PMP programmatic model offers more flexibility in spending and ad volumes compared to the guaranteed deal, which requires you to commit to a specific budget.

At the same time, programmatic guaranteed is known for higher costs than other deal options, but your budget is completely predictable. And with PMPs, sometimes spendings tend to grow.

Frankly, there’s no simple answer to the question, who’s the winner in the battle programmatic guaranteed vs PMP. It depends on a specific situation. So, when choosing between two options, it makes sense to consider such factors:

• Goals. PMP could be the best idea for flexible performance-driven campaigns, and programmatic guaranteed helps strengthen brand image and reach a specific audience on high-quality websites.
• Control. With programmatic guaranteed, you have full control over places your ads will appear.
• Adjustment needs. If you’re planning to change and optimize your campaign, PMP may be a better option.
• Budget. For fixed numbers, choose programmatic guaranteed, for flexible limits – PMP.
• Duration. For shorter campaigns, PMP is better, for longer (still, not very variable) – programmatic guaranteed.

Both these types of programmatic deals can help you reach your goals. But to spend your money consciously, you should know what you’re trying to achieve.

What Is Programmatic Direct?

You have probably heard the term “programmatic direct” before, and now you may wonder: what’s that? Why haven’t we mentioned it among the four main types of deals? In fact, we’ve touched it already!

Programmatic direct is a broader concept that includes preferred deals and programmatic guaranteed. As you remember, the first type refers to deals with a fixed price but without guaranteed inventory. Also, in preferred deals, an advertiser can look at inventory before it goes to the open auction.

Programmatic direct is a good option for advertisers who would like to maintain relationships with publishers since deals are 1:1. Let’s compare programmatic direct vs PMP to understand when to use each type.

Programmatic Direct vs PMP

The key difference between PMPs and programmatic direct is the pricing model. In the first case, there’s a floor price and a bidding process, while in the second one, real-time bidding isn’t involved, and the price is fixed.

Also, the scale is different. PMPs provide access to a wider spectrum of sellers, and with programmatic direct, advertisers make deals with specific publishers.

Sure, there are more differences between these two models, but it’s more important to know how to decide between them:

• If you’re looking for cost efficiency, PMP is a better option.
• If you’re interested in a specific publisher, choose programmatic direct.
• If you want premium inventory combined with flexible pricing, go for PMPs.
• If you prefer to fix your budget, consider programmatic direct.

Flexibility, control, and budget are essential variables in the equation “programmatic direct vs PMP”. So, make sure you haven’t forgotten to include them all in your decision-making process.

Benefits of PMPs for Publishers

Private marketplaces are appealing to all sides involved. For advertisers, they are the source of premium inventory they can access for a reasonable price. As for publishers, the benefits include:

• Opportunity to earn significantly more than on open auctions, making PMPs a lucrative option for publishers.
• More control over advertisers, hence, over brand image. For example, publishers can invite only advertisers they trust to the private auction.
• Brand safety and better user experience. With open auctions, publishers can’t avoid potentially harming situations when irrelevant ads appear on their websites. But it won’t happen with PMPs.
• Data security. The risk of data leakage is much lower than in the case of open auctions.
• More transparency. For instance, publishers know advertisers that buy their ad inventory and a price.

These and other benefits prove that PMPs may be an excellent solution for publishers aspiring to maximize the revenue generated by their inventory without losing control over it.

Conclusion

PMP, the main hero of this article, is perfect for publishers trying to keep control over their inventory and increase revenue simultaneously — and for advertisers looking for flexibility and premium quality.

In PMP deals programmatic approach presents its best features. Private marketplaces' environments are more controlled than open auctions, helping advertisers gain a deeper understanding of the resources where their ads will appear. For publishers, PMPs present opportunities to control the quality of ads on their websites.

To capitalize on all opportunities PMPs represent, it’s important to have a reliable ad server. One of the best options on the market is Epom Ad Server. The great thing about it is the two-week trial period during which you can test all the features and ensure that’s what you need.

FAQ

• What are the main types of programmatic deals?

  There are four main types: open auctions, private marketplaces (PMPs), preferred deals, and programmatic guaranteed. The first two types are auction-based and involve multiple participants, while the next two don’t rely on auctions and involve only two sides of the deal.

• What is a PMP?

  A private marketplace (PMP) is a platform that supports invitation-only auctions for advertisers willing to bid on premium ad inventory. The PMP programmatic model combines the advantages of modern digital advertising technologies with the benefits of direct deals.

• How do PMPs work?

  Typically, a publisher invites buyers or ad agencies to participate in a private auction and negotiates ad inventory, pricing, and targeting options with them. Then, a publisher generated the deal ID. Advertisers connect to the PMP via their demand-side platforms and place their bids on the inventory. The highest bid wins, and the ad is served to the publisher’s website visitors.

• What is programmatic guaranteed?

  Programmatic guaranteed refers to deals made between one publisher and one advertiser about the guaranteed number of impressions for a fixed price.

• What is programmatic direct?

  Programmatic direct is a broader concept that includes preferred deals and programmatic guaranteed. It is a good option for advertisers who would like to maintain relationships with publishers since deals are 1:1

• How do I choose between programmatic guaranteed and PMP?

  The PMP programmatic model offers more flexibility in spending and ad volumes compared to the guaranteed deal, which requires you to commit to a specific budget. At the same time, programmatic guaranteed is known for higher costs than other deal options, but your budget is completely predictable. And with PMPs, sometimes spendings tend to grow.