Why publishers are struggling with private marketplaces

But publishers say that the tech isn’t there yet, or if it is, it’s unevenly distributed.

“When it works, it’s beautiful,” said Business Insider CRO Pete Spande. “We’re not exchanging insertion orders or amending them seven times a month. It’s far superior to how traditional deals are done online. But we’re not bullet proof yet as an industry.”

One problem, publishers say, is the plumbing. Publishers often face compatibility problems between their own supply-side platforms and the demand-side platforms that their buyers use, which gum up the works on their deals. (Turn and Mediamath are two DSPs often criticized by publishers for their lackluster PMP support.)

“Getting the parts to work together is often a big challenge,” said Daniel Young, ‎international yield and programmatic director at The Weather Channel. “There are a lot of technologies, and each of them is trying to build the whole buy side or sell side one-stop shop, so there’s an element of control.”

Other publishers say the problem isn’t with the ad tech plumbing or but rather the demand side itself.

“Advertisers and their agencies are still evolving their strategies,” said Evolve Media president Brian Fitzgerald. “Many don’t want to commit to reserving and guaranteeing spends with publishers, and trying to figure out how they can take themselves out of a real-time, open competitive exchange/SSP/PMP and get first-look at inventory, buying it at low set prices when there is a cookie-match.”

Fitzgerald said the biggest problem with PMPs is that many buyers are approaching them the same way they do open exchanges, which they use to find big audiences at low prices.

“They cannot apply the same numbers-driven approach to buying quality inventory and audiences as they do when they cookie-match in exchanges,” he said. “The two will never marry up, and quality publishing will always get marginalized for the bottom line.”

Matt Prohaska, CEO of Prohaska Consulting and the former programmatic head at The New York Times, said that advertisers that buy into PMPs often come to publishers with a specific-but-limited cookie pool that they want to retarget against. A car company, for example, that wants to target in-market car-site visitors could use a publisher’s private exchange to get a better look at how that publisher’s audience overlaps with the consumer targeting pool.

The problem is that publishers often overestimate how much those two audiences overlap — in part because they often don’t ask buyers how big their cookie pool is in the first place. The result: Publishers expect buyers to spend $500 a day, but they end up spending fractions of that because they don’t see enough impression opportunities they’re interested in.

“Publishers often think things are wrong with their setup, but the advertisers are just looking at the shelf and taking the handful of impressions that they actually want,” Prohaska said.

This is why some say that publishers’ PMP problems might be on publishers themselves.

“Programmatic has got everyone chasing tails for dollars when they should be evaluating opportunities more diligently,” said Rich Routman, president and CRO of Sporting News Media. “If they’re using a DSP you haven’t heard of and are targeting a very specific audience, you probably should think twice.”

Routman said that one of the ways publishers can avoid compatibility problems and yield misconceptions in their PMP deals is to ask buyers the right questions upfront — “How many people are you targeting?” “How much do you plan on spending?” “Which DSP are you using?” etc.

“Blaming the tech is the easy way out,” Rottman said. “The tech works, but probably not up to the standard we set for ourselves. There’s also a people process here that’s a little broken.”