Brands and agencies on the pros and cons of private marketplaces
At the Digiday Programmatic Summit in Palm Beach, Florida, this week, top marketers and publishers are on hand to discuss the trends, themes, challenges and opportunities posed by programmatic advertising.
We asked four executives — two from brands and two from agencies — the same question: Are you moving from an open exchange to a private marketplace? Why or why not? Their answers, edited for length and clarity, run the gamut from feeling gung-ho about private marketplaces to being confused.
Gary Milner, director of global digital marketing, Lenovo
In Europe, our ratio of open exchanges to private marketplaces in Europe is six to four. But in the U.S., we haven’t figured out the optimal ratio yet. Yes, our ad spend on private marketplaces started going up around nine months ago, and we intend to do more going forward. This is because we can get unique inventory that we can’t access on open exchanges. Private deals also mean better viewability and more targeted audiences. They might not be cheaper than what you buy directly from publishers, but if you buy in volume, you can get discounts.
Gosha Khuchua, senior director of digital and programmatic media, Ticketmaster
Our position is “less open exchanges, more private marketplaces.” We started allocating more ad spend to private marketplaces when we brought programmatic in-house at the beginning of this year. I still think some publishers are having a difficult time pricing their inventory. But the question is: If I can buy this on an open exchange, why would I buy the same thing on a private marketplace?
Another pitfall of private marketplaces is publishers’ ability to ingest our data. Spotify, for example, is selling its inventory programmatically on Criteo, but they can’t properly process our data. How can I inject our first-party data into those platforms is a big challenge.
Jon Mansell, vp of marketing innovation, Magna Global
From a negotiation perspective, the ad spend flowing on open exchanges doesn’t have intrinsic value for us as an agency. For instance, if Hearst wants to do a programmatic deal with us, the money that goes into an open exchange appears to come from the demand-side platform — it doesn’t appear to come from an actual holding company. So the vendor looks like a buyer, which leads to a transparency issue.
From the client perspective, when they buy from private marketplaces they are in a better position from a priority standpoint and their inventory performs better. So our position is to maximize private marketplaces. Our goal is likely to spend more than 50 percent of Cadreon’s programmatic ad budget on private marketplaces by the end of 2017.
Andrew LaFond, media director, R/GA
We have tried open exchanges and private marketplaces, and we mixed results. We set up private deals for some clients, but we were not able to get the scale we expected to have, given their spend on impressions. I’m not sure if it’s because we did something wrong on the buy side or there is not as much inventory in the private marketplaces as you’d think. Conceptually, private marketplaces are where we want to be, but there’s a piece of puzzle that I haven’t figured out.
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