What are RTB, Programmatic Direct and Private Marketplaces?

Programmatic advertising has become one of the fastest growing segments of digital marketing due to its inherent abundance and efficiency. But with so many different terms being used, how does one know exactly what it is?

Real-time bidding

Real-time bidding is the buying of ads through computer-run, real-time auctions. The inventory is bought blind, whereby the advertiser only knows the category of site that the ads will appear on, but not the exact site. An Open Exchange allows many buyers to bid on the inventory of many publishers in an auction environment, and is the most standard way to buy inventory.

Real time bidding

Ad exchanges store numerous sites and thus provide an abundant amount of inventory. Moreover, the infrastructure of the ad exchange made the media buying seamless and more efficient for marketers. The ad exchange model follows the same concept as the real stock exchange. Publishers place their inventory in the exchange at lower rates and the traders, who will be marketers in this case, will bid against available media and whoever bids higher will win that impression.

If you’re looking for the most cost effective way to buy with access to the largest audience, fully-automated Open Exchanges could be the way to go.

Private Marketplace

A Private Marketplace (PMP) is an invitation-only RTB auction where one publisher or a select number of publishers invite a select number of buyers to bid on its inventory. Inventory purchased is transparent – the buyer knows exactly which site the ad will run on. With Private Marketplaces, the general premise is to skip the exchanges altogether.

Private Marketplace

With Private Marketplaces your buying platform (DSP) plugs directly into the premium publisher’s inventory source, combining the strengths of both buying approaches to essentially create a third buying approach. The inventory transaction is within an auction environment but the terms of the deal are pre-negotiated between the buyer and seller and the advertiser must be approved – so it is more manual than open exchanges. A unique identifier is generated to represent the terms of the deal that was made between the buyer and seller – this is called the Deal ID.

Traditionally, one would utilize the direct IO buy to achieve a branding objective, while buying on the open exchange in hopes of getting conversion volumes at a super low eCPM. Deal ID allows you to easily reach premium placements on-demand through your DSP platform, while also giving you a way to apply your first party data to any and all premium placements.

So what does this mean, and why should you care about your data being applied to premium placements?

  • In very simple terms, with Deal ID’s you are able to apply all the same techniques and strategies that you’ve had success applying in open exchange buys, across 100% premium placements.
  • You can access inventory before it hits the open exchanges and potentially gain additional reach (access to users who might not be found across the open exchanges).
  • And just like in the exchange, when your data is applied you are only bidding and buying that cookie/impression/user which meets your criteria, so you are not buying heaps of useless impressions at $20 flat CPM and hoping the people you want to target are a match with one particular publisher. You can buy 10 impressions or a million impressions – it’s totally up to you and depends on your appetite for premium inventory.
  • You also get “premium” access at a lower price than you’ll likely get with Programmatic Direct. The rates usually seen are something in between open exchange rates and IO direct rates.
Private Marketplace

Programmatic Direct

Programmatic software also allows advertisers to buy guaranteed ad impressions in advance from specific publisher sites, which is referred to as Programmatic Direct. Not to be confused with Private Marketplace (RTB), Programmatic Direct is direct sold, guaranteed inventory, that doesn’t require human intervention to run (non-RTB).

Programmatic Direct

Under programmatic direct deals, a publisher’s sales rep may negotiate an arrangement with an advertiser that includes top-tier inventory like home-page- takeover ads at a fixed price for a guaranteed number of impressions. It’s the equivalent of booking a hotel room directly through the hotel, rather than from an online retailer like Expedia.

Canadian marketers prefer direct deals to better control price levels rather than the open RTB market. Publishers have typically protected premium inventory for direct sale on programmatic direct models. The thinking goes, however, that CPMs for both premium and non-premium inventory will adjust to market prices and spread the benefit between publishers and advertisers.

In 2014, the IDC estimates $674.9 million in display ad spend will be conducted via premium programmatic. By 2018, this number is projected to reach $9.3 billion.

Programmatic Direct is a good choice for companies focused on brand safety, inventory control, premium placements etc.

Programmatic Direct

Download the new eBook on Programmatic Buying: http://pages.mediative.com/introduction-programmatic-buying

Rebecca Maynes on linkedin
Rebecca Maynes
Rebecca Maynes is Mediative’s Manager, Content Marketing and Research. Her expertise lies in the creation of engaging thought leadership for Mediative. From compiling eBooks and case studies, to conducting research, analyzing data and writing white papers and reports, Rebecca is an integral part of Mediative’s Marketing and Research team. Rebecca began her career with Yell.com in England, and, after emigrating to Canada in 2005, she has gone full circle, joining Mediative, a Yellow Pages Group Company, in 2009. Prior positions include Marketing for a B2B Software company. Rebecca graduated from Cardiff University in Wales, UK, with a First Class Honours BSc in Business Administration.