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Tech Talk with Millennial Media: Private Marketplaces - Bridging Mobile Programmatic & Direct Buys
The document discusses the growth of programmatic digital display ad spending, highlighting that mobile/tablet programmatic spend is expected to reach $14.15 billion in 2016. It emphasizes the benefits of private marketplaces, including less buyer competition and increased transparency, while outlining common types and pricing models. Additionally, it provides guidance on negotiating private marketplace deals and getting started with programmatic campaigns through Millennial Media.
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Tech Talk with Millennial Media: Private Marketplaces - Bridging Mobile Programmatic & Direct Buys
- 1. Private Marketplaces BridgingMobile Programmatic & Direct Buys Susan Ridley Sales Director - Programmatic
- 2. US Programmatic DigitalDisplay Ad Spending $2.92 $5.62 $6.52 $6.26 $1.33 $4.44 $8.36 $14.15 $4.16 $9.25 $11.01 $11.84 $0.08 $0.80 $3.87 $8.57 $20 $15 $10 $5 $0 2013 2014 2015 2016 Desktop/Laptop Mobile/Tablet Real-time bidding Programmatic Direct Mobile/tablet programmatic spend to reach $14.15B in 2016, outpacing desktop by 126% Growth in programmatic direct expected to outpace RTB 16-fold by 2016 Source: eMarketer, October 2014 Billions
- 3. US Real-Time Bidding Digital Display Ad Spending $8.14 $0.08 $8.48 $8.52 $4.07 $1.11 $2.53 $3.31 Growth in real-time bidding Billions $12 will be driven by adoption of $10 $8 $6 $4 $2 $- 2013 2014 2015 2016 Open Exchange Private Marketplace private marketplaces – projected to account for 28% of total US RTB spending in 2016 Source: eMarketer, October 2014
- 4. Benefits of Transactingin a Private Marketplace Private marketplaces marry the efficiency of programmatic buying with the preferred access of a deal struck directly with a publisher Private Marketplaces offer: • Less Buyer Competition • Curated / Exclusive Content • Increased Transparency • Brand-safe Environments • Negotiated CPMs • First-look Access
- 5. Choose the buyingmodel based on campaign goals Buying Model Also Known As Seller : Buyer / Inventory Transaction Open Auction Real-time bidding Open exchange Open marketplace One : All Unreserved RTB Auction Private Marketplace Private auction Closed auction Invite-only auction One : Few Unreserved RTB auction or Fixed Rate Preferred Deals Private access Unreserved fixed rate First right of refusal One : One Unreserved Fixed rate Programmatic Direct Programmatic guaranteed Programmatic reserved Automated guaranteed One : One Reserved Fixed rate Source: IAB, 2013
- 6. 3 Common Typesof Private Marketplaces Custom Site Lists Client specific / custom site-list based • app/site performance • brand-safe lists Single Publisher Content / Audience Specific Packaged apps/sites based on specific content or audience characteristics • entertainment, music sports • men’s lifestyle, parenting/moms 01 02 03 Target inventory from individual publishers • unique placements • only available programmatically in a PMP
- 7. Private Marketplace Economics Premium Pricing Pricing is higher than open auction due to additional value, such as: • first-look access • impression-level data • exclusive inventory Discounted Pricing Inventory may be offered at a discount compared to open auction in exchange for guaranteed spend Auction-based or fixed rate • Auction-based: competing with smaller group of buyers in a competitive, private auction • Fixed rate: impressions purchased at pre-negotiated flat rate
- 8. Negotiating a PrivateMarketplace 1. Identify what you want to achieve by purchasing in a PMP • Access inventory not available in the open market • Assurances of brand-safety by targeting known sites • Increase reach & win rate with first-look access 2. Understand pricing models • Flat CPM rates are commonly available • Trade-off between increased impression volume & CPM 3. Negotiate the deal • Online or offline negotiation • Identify specific apps/sites, content, placements, etc. • Can be pre-packaged or custom-built 4. Establish the Private Marketplace • Deal ID • Private Tags
- 9. Getting Started Haveor building a relationship with a DSP: • Purchase Millennial Media inventory via open auction or in a private marketplace • MMX supports Deal ID, enabling buyers to package inventory in RTB or PMP Prefer a managed service: • Let Millennial Media manage your programmatic campaign Contact us at rtb@millennialmedia.com to get started
- 10. Millennial Media Exchange 1.3B daily impressions available on MMX 15+ MMX mobile-first targetable data points per impression 134MM Impressions/day are found only on MMX 78% Impressions are lat/long enabled More accuracy, transparency, and control at scale 76% Impressions contain language information
- 11. Susan Ridley SalesDirector, Programmatic Millennial Media Contact us at rtb@millennialmedia.com to get started
Editor's Notes
- #2 Hello everyone. [Suzy Ridley introduction]. Our session today is all about private marketplaces – or PMPs – in mobile. They are particularly strong in mobile as marketers want more control, greater transparency and assurances of brand safety. Over the next few slides, I’ll outline common types of private marketplaces and share practical tips on how to determine if participating in a private marketplace is right for you.
- #3 http://totalaccess.emarketer.com/Reports/Viewer.aspx?R=2001457 First I want to spend just a minute highlighting the growth of programmatic ad spending in the U.S. Each segment called out on the chart is moving up and to the right. Programmatic spend is increasing across all device types. We’re continuing to see growth in real-time bidding. And according to eMarketer, will continue to see sharp rises in programmatic direct.
- #4 http://totalaccess.emarketer.com/Reports/Viewer.aspx?R=2001457 This chart zeros in on the real-time bidding aspect of programmatic. In the U.S., eMarketer reports that digital advertising bought and sold via RTB will total $11.84B by 2016. This growth is expected to be attributed to the rising adoption of private marketplaces – which we’ll talk more about in this presentation.
- #5 A private marketplace is essentially a way to purchase specific inventory before it reaches the open auction. Specific inventory can be a whitelist of publishers or types of content. Buyers know in advance the specific inventory sources they are bidding on, and have often pre-negotiated CPMs. It really brings together the best aspects of programmatic and a direct buy. Private marketplaces offer less competition and first-look access to specific inventory. Transacting via a private marketplace gives buyers additional transparency, they know exactly where their ad will run, they know this inventory is brand-safe. There is a negotiation process as well where different attributes can be exposed for targeting or optimization. There are benefits to transacting in a private marketplace for both the demand side and the sell side. For buyers, benefits include: Preferred access: buyers will have the opportunity to bid on impressions before they reach the open auction. As a result, buyers can win substantially more impressions. This is especially important if the audience you are targeting is … … highly desirable. In an open auction, there will likely be increased competition for those impressions vs in a private auction. However, if for example you are targeting attributes that are highly desirable, the ability to bid on these impressions – and increase your reach – can have a positive impact on your ROI. Even if you pay a premium for these impressions, if they are driving post-conversion revenue, you will see a positive impact overall. Improved efficiency can come in many forms. It could translate into better performance, higher response rates, or access to different audiences or inventory. On the sell-side, benefits includes: Access to additional demand dollars. Buyers are already earmarking budgets for programmatic. When publishers enable a private marketplace, they can increase their share of these budgets either through incremental inventory now available programmatic or higher CPMs - trading off data, transparency, exclusivity. When publishers carve out premium inventory in a private marketplace there is an exclusive nature to that inventory. It could be placements that are only available in this PMP. It could take the form an exclusive programmatic play where strategically the publisher is making their programmatic inventory only available in a private marketplace so they can reduce channel conflict with their direct sales teams, yet take advantage of programmatic demand. Private marketplaces give sellers additional control. They have more flexibility in determining price, deciding which placements are available, approving buyers that can access their PMP. It makes sense for both sides to consider private marketplaces and another way to transact in a programmatic environment
- #6 Buyers planning a programmatic campaign have several buying models to choose from to execute the buy. Each model has it’s benefits and will be the model of choice based on the individual campaign goals. Shown here are the IAB definitions for each buying model. If you look at the line for Private Marketplace, you’ll see that this is sometimes referred to as a private or closed auction, or an invite-only auction. These are hallmarks of the offer. The key differentiator is that the inventory is unreserved, like in an open auction, but there is less competition as there are fewer bidders. Note that the transaction can vary from a real-time auction to fixed rate based on the individual set-up.
- #7 There are countless opportunities for private marketplaces. What I’ve tried to show here is some of the common types of PMPs. First on the list is custom site lists. This is customized based on each individual buyer. For example, if you have a list of apps and sites that have performed well in prior, similar campaigns, you build a private marketplace of top performance properties. You could also look at backing into a specific performance goals based on high-conversion placements purchased in a private marketplace. Similarly, if you have brand-safe site list and want to run exclusively on those properties, you can set-up a private marketplace containing impressions from only those sites as well. This type of PMP can be built based on any criteria. The second one on the list is single publisher. This is where individual publishers are making their inventory available through a private marketplace. For some publishers, this is the only way to purchase their inventory programmatically. Others may make specific placements available only on their PMP. Content / audience specific PMPs group inventory based on the type of content or specific audience characteristics. For example, you can bid on inventory associated with specific content such as entertainment, music, news, sports; or reach audiences such as moms. You will be targeting inventory from multiple apps/sites, but there is a common thread(s).
- #8 Moving on to the economics, each private marketplace is going to be unique. In comparison to pricing in the open market, there are going to be times when buyers will pay more for the inventory in a private marketplace. There is an economic value with getting first-look access to inventory. Even if the CPM is higher, if these are impressions yield higher conversion rates, buyers will see a greater long-term ROI. Additional data elements could be exposed in a private marketplace garnering a higher price, or inventory or placements that are not available in the open exchange could be made available. On the flip side, buyers may be able to negotiate a discounted rate for specific inventory or placements in exchange for a commitment on ad spend. This is something to talk to your partners about. Buyers will also want to consider the basis for pricing. With auction-based pricing, buyers are generally competing for the impression in a second-price auction, similar to the open market. Alternatively, impressions can be purchased at a flat/fixed rate. The latter option can aid in budgetary planning as the cost remains constant for winning bids.
- #9 Once you know that you want to participate in a private marketplace, that’s where the fun begins. Start off by outlining what you want to achieve by purchasing in the PMP. Do you want access to inventory not available in an open auction? Do you want to target specific types of inventory (like lifestyle, or weather) or inventory from a specific publisher or group of publishers? Your partner should be able to package a PMP based on your individual needs or may have packages readily available. Is your primary driver for purchasing in a PMP to expand your reach and increase conversions. Knowing your goals upfront will help you determine the type of PMP that will be meet your needs and will also help as you negotiate the terms. Private marketplaces offer different pricing models compared to an open auction. While you still may bid for inventory among a smaller group of competitors, some PMPs support flat CPM rate as well. This gives buyers greater predictability in their ad spend. Pricing can also be higher or lower when compared to a private auction. For example, buyers may place a high value on a specific audience and in exchange for first-look are willing to pay a premium. On the other hand, CPMs may be discounted to buyers will to guarantee overall spend. The actual deal negotiation can take place online or offline depending on the technology. Either way, there will be communication on the specific inventory, parameters exposed, pricing, etc. Once all of that been determined, the actual marketer is created. There are multiple ways to execute a private marketplace, including Deal ID and private tags. This is the physical indicator to the buyer that this impression meets all of the predetermined requirements associated with this deal.
- #11 Millennial Media has made significant investments in programmatic. Last year, we launched the Millennial Media Exchange. There are over 1.3 billion impressions available each day on MMX, about 11% of them are unique to Millennial Media and are not found elsewhere programmatically. Our impressions are data-rich and are passed from the 60,000 apps/sites that have integrated the Millennial Media SDK. Additionally, you may have heard that we’ve signed a definitive agreement to acquire Nexage, a leading mobile SSP and advertising exchange.
- #12 Please reach out to us if you have any questions. You can contact us at rtb@millennialmedia.com. I, along with a couple of my colleagues, are here for the duration of the conference as well and will be happy to field any questions or schedule follow-up time to connect. Thank you.