Open Or Private Marketplace? How To Decide

by Andrew Casale (VP Strategy)

We’ve continued to see private marketplaces as the preferred model for facilitating programmatic access to impressions from major publishing companies, with new announcements from the likes of Hearst, Federated Media and Condé Nast, along with many that have been in market for over the year (NBC Universal, Quadrant One, etc). However, while evaluating whether or not launching a private marketplace makes the most sense, there are three things every publisher should consider in the context of programmatic selling: relationships, data and transparency.


Both open and private exchanges use machines to handle workflow – automated buying and selling, targeting and optimization. The open model creates no conversation between the publisher and agency trading desk (ATD)/buyer, but is ultra efficient because it requires no setup. On the other hand, private marketplaces benefit from the requirement that relationships make them work — but that also means additional work is required to transact. Open and private marketplaces act as two tools that can be used exclusively or interchangeably based on the scenario to maximize the opportunity programmatic represents.

Publishers wary of real-time bidding (RTB) can arrange private marketplace deals through discussion with specific buyers on their own terms, rather than opening their impressions for all to access. We’ve had conversations with publishers who haven’t embraced programmatic selling, but want to transact with ATDs that are new prospects that their sales team should be talking to. Publishers may be specific about whom they want to buy, and only want to transact with that short list.

Relationships are very important for private marketplaces, but publishers have to dedicate resources to enable those relationships to thrive. In many cases, buying through private marketplaces is an easier “sell” for agency clients, especially conservative ones, because of a familiar brand name and warm relationship with the seller. Marketers may view open marketplaces as risky or foreign because billions of impressions in them, and only algorithms and machines facilitate the transactions. Certain brands embrace programmatic buying only when connected directly to premium publishers they know, skipping the open market entirely. While performance and price matters to marketers, so does brand association.


Publisher first-party data can have a significant impact on ad effectiveness. With RTB, publishers increasingly worry about how they’ll control their valuable user data so they typically leave data out of their strategy. Private marketplaces address this worry because data rights can be negotiated into individual deals. If the right deal can be negotiated, data can be made available at bid time as part of the transaction or omitted if the deal terms do not satisfy the publisher’s valuation of its data. Access to data is important to the buy side, and striking the right balance between price and budget can amplify the size of opportunity for a publisher.


Some argue that impressions available in private and open marketplaces are exactly the same. This is where transparency becomes important. With the correct configuration, private and open exchanges should never contain the same inventory. Typically, a publisher will only make its unallocated impressions available on the open market in a blind or semi-blind capacity. This is done for channel protection, to mitigate having impressions available for bid in real-time while a direct sales force is also selling the same impressions. However, buying blind means neither environmental quality guarantees nor contextual relevance, which deters advertisers from spending. Our internal research shows that selling blind typically means losing up to a half of all bids.

For publishers with multiple publications and millions of impressions, it makes sense to break apart the high valued placements and sub-brands (those that are in most demand), and carve out a private marketplace around these impressions. The remaining impressions are best suited for an open exchange where a publisher can access the most demand. It’s key for different impressions to be available in different buckets to create the appropriate buy side value proposition for a private marketplace.

Publishers considering programmatic selling should speak to the buy side directly. Publisher can better assess if they can meet advertiser needs through an open marketplace, or if advertisers are better suited for transactions handled one to one in a private environment. Every publisher is different, requiring a unique approach to maximize success.

How Publishers Can Maximize Value In An RTB World

by Andrew Casale (VP, Strategy)

The introduction of real-time bidding (RTB) has dramatically changed the mechanics behind inventory valuation. Publishers must take a closer look at their sales channel partners to maximize value. RTB, a data-driven buying model, allows advertisers to bid on qualified display media in real-time, at the impression level.

Publishers must maintain control over impressions to assure that inventory value is retained, direct sales channels preserved and the audience experience is upheld.

RTB requires the introduction of additional relationships, such as demand side platforms (DSPs) and agency trading desks, which could further dilute a publisher’s control in the transaction. A DSP aggregates impressions from various sources and adds a layer of user data to identify specific audiences required by advertisers. DSPs then work with channel partners, like ad exchanges, to regulate the type of inventory entering the marketplace.

Publishers need to understand these relationships and work with their channel partners to incorporate them into the parameters. This means asking partners the right questions:

How closely do you work with DSPs?

Channel partners that have the closest integrations with their DSP partners will be able to provide the most flexibility when it comes to implementing mechanisms to augment controls over who and how they are bidding on your inventory.

How granular do your advertiser controls get?

Advertising is an integral part of the user experience, along with actual content, of course. Publishers need to be able to filter out irrelevant ad categories, problematic brands and even some creative that may diminish the value of the content on a page and deter users.

How can you avoid channel conflicts?

The rate of a buyer’s bid is largely dependent on the exact location of an impression. Channel partners should give guarantees that advertisers, brands and verticals that pose a channel conflict can be selectively blocked and that this setting is proactively maintained –even when inventory is sold at the exchange level.

What is the vetting process for your advertising partners?

Publishers expose their inventory to a larger swath of advertisers when utilizing RTB, which theoretically improves eCPMs. However, just because an ad partner can promise more advertisers doesn’t mean any advertiser will do. Ad partners should vet advertisers before including them in the process. Publishers should investigate the degree of controls they have over who and what is eligible to run on their site.

How do you motivate bidding?

To maximize RTB results, the marketplace must be saturated with buyers, and those buyers must be confident they are getting value for money. Partners must know where buyers see value — because sheer volume or sole reliance on third-party data is not a good enough answer.

How do you optimize bid solicitation?

RTB partners are required to make decisions about hundreds of bidders in milliseconds, and it takes multiple partners for RTB to run smoothly. Monetization partners should have protocols in place that allow for smooth communication between all parties with minimal errors and overhead.

Can I set reserve bids?

Auctions inherently attract buyers looking to get the most for their money, but publishers should be able to protect their brand value by setting reserve prices. This gives publishers a say in how inventory is priced, without introducing inefficiencies into the process.

What is the value of a private exchange?

Factors like reputation and publisher caliber carry less weight in the RTB world than publishers are used to, which can lead to below-par inventory valuations. In some cases, it may be beneficial to strike a deal within the RTB framework with an advertiser you already know is highly interested in your publication. This tactic gives publishers some control in a market that typically has complete control over inventory value.

RTB is becoming a vital part of selling online, so publishers should remain vigilant when introducing partners into the mix.