TRENDING INFLUENCER MARKETING NEWS

Join over 30,000+ Marketers who read our blogs and learn how to increase sales by using branded content, celebrities and influencers

    A Comprehensive Look At Private Marketplaces

    Posted by Anya Salmen on August 6, 2019 at 9:00 AM

    Navigating Through The World Of Digital Advertising

    Digital advertising is currently at a place where traditional RFPs have become too slow, and programmatics have taken over to automate the intricate world of ad buying. As any advertiser (whether it be agency or brand owner) already knows, it can become a difficult undertaking determining the best way to advertise that suits your company's goals with the many formats available today. 

    Private marketplaces are one of the largest and fastest growing practices to buy advertising across film, television, and virtually all display ads. It has the largest reach across potential consumers, as well as a guarantee of premium content and publishers that translates to effective impact and high ROI. In this blog, Hollywood Branded takes a comprehensive look at private marketplaces, their ebb and flow and what they can do for your brand. 


    Blog Template - Owned Content


    What Exactly Is A Private Marketplace, And What Advantage Does It Serve Brands? 

    The easiest way to think about private marketplaces is to think about exclusivity; it's an invite-only auction between a large scale publisher for display ads (with nearly infinite reach) and multiple significant media buyers/advertisers. 

    Programmatic ad buying refers to software used to purchase digital ads, and is the most vastly used system today. It helps automate the decision process for companies and optimizes target audience to different degrees depending on the deal type. The world of programmatics can be difficult to sift through, but in general there are a few different deal types that buyers can use to get their advertisement displayed across the internet and on relevant sites. programmatics

    1. Real Time Bidding (RTB) or Open Auction - An auction where ad space is unreserved, and pricing is determined through an open auction. Every impression is sold real-time, at the moment it becomes available. Quality cannot be completely guaranteed, however advertisers are able to adjust their bids based how the market changes. 
    2. Programmatic Direct - Reserved inventory is bought at a fixed price. This is where publishers will reserve portions of their inventory for particular buyers that fit their criteria. The main difference is that buyers and sellers will already know each other through this form. 
      1. Preferred Deals - These are one of two large forms of ad buying that fall under the umbrella of direct programmatics. Preferred deals are direct deals between the buyer and seller that are negotiated privately between the two parties. 
      2. Private Marketplaces (PMP) - These are invitation only auctions between exclusive advertisers and publishers. With these comes more premium quality content, as well as a higher priority to both parties which often creates the best matches. 

    Taking advantage of an invitation to a private marketplace is crucial, because the quality of inventory is more valuable therefore almost guaranteeing the highest ROAS. As a brand, you will have more control over targeting and what kind of impressions you will make.

    Private Marketplaces are a controlled environment that are inherently less stressful as there is no commitment, no sifting through hundreds of publishers, and a group of buyers/sellers that are already theoretically compatible.


    Private Setups Are Pulling In The Most Revenue Year Over Year

    A few statistics in relation to the growth of PMPs:

    • Data privacy concerns due to recent data protection issues in the industry are driving marketers to move from open auctions and exchanges to private deals. In a survey of 300 marketers, 55% confirmed they would be moving their ad spend money as a result of this. 
    • For all reasons, not limited to data privacy concerns, 62% of media buyers plan to spend more money through private marketplaces this year.
    • Additional ad spending from 2018 to 2020 is on track to being close to $19 billion, with the majority going to private setups.
    • Lastly, eMarketer predicts that by 2020 86.2% of all mobile display ads will transact programmatically. That equates to an estimated $46 billion spent this year. The reason for this is partially because of increased investment in mobile apps and social platforms and the ongoing efforts to make every business app-centric and mobile friendly.

    Let's Compare And Contrast To Google Ads

    You may wonder how this compares to the famously successful behemoth, Google Ads. Are they direct competitors? Is one greater than the other? What should I be advertising on? Measuring the effectiveness between the two may be trivial because it will depend so heavily on the brand, what they are trying to accomplish, and how much money they have. 

    Google Ads is (conceivably) limited to Google. This, as any marketer will know, is not drastically limiting however. Google as an ad platform via search result dominates by reaching 90% of all internet users in the world. The main difference is that is was built for text ads, SEO, and keywords, not display ads.

    Google-search-So while Google Ads has a hold over search results, PMP ultimately has the largest potential reach across the internet as a whole (not just search returns) because it covers so many bases, 98%, to be exact. It can span across music, television and other streaming platforms, social media and mobile applications and basically the entire internet.

    Another defining difference is that Google Ads is open to the public; quite literally anyone and everyone that wants to start a business can jump on. PMP is on the other extreme of the spectrum, being invite-only with pre-negotiated terms for buyer and seller. 

    Both pride themselves on their ability to hyper-target audiences with advanced formulas that go beyond just demo and psychographics, which they both indeed do. However, PMP wins in this case as they provide advertisers access into the vendor-neutral RTB (real-time bidding) marketplace. Real time updates to the minute are relayed to advertisers whereas Google Ads can only update every 2-3 hours. This is where PMP gives a huge advantage in monitoring the effectiveness of your ads; its allows you to evaluate and re-evaluate your spending with no time wasted. 

    The final word is that brands should look at using them together for a cohesive reach, as opposed to picking a side. They both serve their purposes and engage with consumers in very different ways. PMP in nature is disruptive to consumers and even with advanced targeting may reach uninterested people. Google Ads is less disruptive, but limited to search engine results and cookies. New call-to-action


    Case Study #1: Hulu

    On January 1st of this year, Hulu opened up their programmatic pipes a little more and gave exclusive advertisers and agencies (finally), a new and improved private marketplace which is huge news for a site with such valuable ad space. 

    This allows advertisers to bid on Hulu's inventory through agency trading desks and demand-side platforms (software that purchases advertising in an automated way). This is contrary to before when advertisers had to go through Hulu's direct sales team to set prices and look at their inventory.

    Moving with the respective consumers, most advertisers are shifting from Facebook-like platforms to streaming.

    Jeremy Helfand, VP and head of ad platforms at Hulu has repeatedly noted how fast the subscribers are growing as well as the amount of hours new subscribers are watching. This means increased ads they are consuming, which makes it all the more valuable. For reference, Hulu's pricing averages between $12-$30 per thousand impressions. 


    Case Study #2: Snapchat

    Snapchat also recently opened up their own private market for advertisers, however, they haven't performed their promised "amazing" ROAS for publishers quite yet. 

    Snapchat's programmatics, although similarly set up to larger social platforms like Facebook and Instagram, has bigger limitations for their publishers. It is in part due to their smaller audience; an average of 186 million per day, while Facebook sees 1.5 billion, Instagram 500 million, and Youtube over 1 billion.

    What does the ad space look like? Snap ads are now in two forms: un-skippable (priced higher) or skippable 6 second ads between shows and content on the app.

    snapchat discover

    Snapchat realizes its smaller impact for brands and say they are in a "testing" phase. A Snapchat spokesperson says they are looking at growth and changes, such as changing the name of their private marketplace programmatics to "premium content targeting", as well as allowing more customization for ad buyers which would allow them to bundle specific shows and from all different media partners and ultimately compete for more refined content. 

    He also noted that original content on Discover (the name for Snapchat's network of channels and content and pictured on the left) has grown 30% in views from last year.

    He finally ended his statement by saying that Snapchat expects their premium content targeting to move out of beta further along 2019 with significant improvements for ROI. For reference, Snapchat's pricing at the moment is $3-$10 per thousand impressions.


    The Breakdown 

    Hopefully this was a helpful breakdown of what private marketplaces are, how they fit into the world of ad buying, and some of their advantages and disadvantages. They are important to understand for any marketing and advertising branch that has the capital and rising reputation to be invited to one of these private auctions.

    It's a great way to reach millions of impressions in a calculated, controlled way with more precise analytics and the reach is more wide-spread and valuable to the viewer/company.

    The entertainment industry is ever-changing and evolving; that's why its crucial to a brand to stay informed and on top of consumer behavior and how it affects their business. For more on related topics, check out these other blogs written by our team:

    Want to learn even more about successfully marketing your brand? Check out our Product Placement 101 guide for free below!

    Download The Infographic


     

    Topics: Business Advice