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Navigating Private Marketplaces: Part 1

Tue, Oct. 11, 2016 | By: Tremor Video

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It's a pivotal year for programmatic video, at least according to eMarketer, which recently predicted that in 2016, 60 percent of all digital video ad spending will be conducted through programmatic technology.

Whether you've been working in digital marketing for more than a decade or are relatively new to the industry, you've likely spent a lot of time thinking about programmatic. But how much time have you devoted to analyzing private marketplaces? Born of programmatic advertising, PMPs are an increasingly important subject for both buyers and sellers of video advertising. They're transforming the way we buy and sell digital ad inventory—and there's no end in sight.

Time for a Change
To really understand this form of automated media buying, you have to go back to the beginning. It was the late 2000s, and display advertising was becoming incredibly complex. Media buyers were saddled with managing thousands of formats and placements across countless publisher sites. The industry needed a change, and that change came in the form of programmatic technology.

What this data-driven, real-time marketing solution provided, above all else, was greater control. Buyers suddenly had the ability to hand-pick their display ad impressions based on criteria like customer data sets. Soon, they were doing the same with mobile and video.

As the years went by, more companies launched open ad exchanges in an effort to optimize the ad buying process, reduce inefficiencies, and level the playing field between big brands and smaller advertisers. It may not have changed the world, but this shift certainly made life a whole lot easier. That coveted video inventory buyers had been wishing for was suddenly easily accessible, and they had their pick of where to place their creative for maximum impact and reach.

Before long, sellers of brand advertising started to feel the pressure of a growing demand for programmatic impressions. While they wanted to meet their clients' needs, they couldn't feasibly cede all control over their ad rates. This "waterfall," or inventory yield management system, worked for all involved: sellers benefited by selling remnant inventory through open exchanges, and buyers were able to snap it up without compromising their goals of reaching their target customers. But that still left premium inventory, which, with digital video in particular, was a critical piece of the marketing puzzle. The new automated ad buying reality had its advantages, but the downside was that the impressions advertisers were buying didn't always meet the high standards they held for their brand campaigns.

Rise of the PMP
Enter private marketplaces. PMPs allowed publishers to manage their revenue streams by determining how and where to release their inventory, while also allowing them to sell their premium inventory through the automated system that their clients were increasingly accustomed to. It was a flexible solution for monetizing desktop and mobile inventory that offered the ease of use and transparency buyers were seeking. Both publishers and their clients began to rely on PMPs more heavily, because in many ways PMPs offered the best of both worlds: They were the long-anticipated middle ground between the real-time programmatic marketplace, open exchanges, and the direct deals of old.

With every passing day, it gets harder to remember what it was like to plan and execute a successful digital campaign without PMPs. These marketplaces are now as much a part of the online advertising landscape as CPMs. Content owners and brand marketers the world over count on premium marketplaces to sell and buy advertising across channels and devices. By streamlining the buying process, they maximize their inventory, creative, and reach.

And it doesn't end there. At Tremor Video, we are applying progressive technology to PMPs that are built to serve the needs of both buyers and sellers of video ad inventory: high performance, set pricing, and transparent placement.

What does it all mean to the future of digital media? Can we expect automated selling and buying to completely usurp the traditional approach on which the online advertising industry was built? What can the top PMPs of today offer that sets them apart from their competitors?

Check back for the second installment of this series—and don't forget to sign up for our newsletter to get all the latest news about PMPs.

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