Open Exchange or Private Marketplace (PMP) – Mobile Advertising in times of No-Cookies policy

Most public announcements in 2019 already pointed into the direction of change: big companies such as Bayer announced that they want to gain back control of their programmatic spendings and started to move programmatic advertising in-house. With 2020 just beginning, it becomes clear that being in control over advertising spendings is not the only matter of concern, as privacy regulations are making it more complicated to advertise in a mobile environment as stated by Ronan Shields in Adweek just recently.

Programmatic advertising has become one of the fastest growing channels of digital marketing, more than 80% of advertisers were at least once struggling to choose the right method to buy ad inventory. So, as advertisers continuously search for better ways to get more return on ad spending (ROAS), they invented several media-buying methods.

Let’s take a look at a mini-cheatsheet of the most popular programmatic media-buying methods:

Programmatic direct

The success of your advertising campaign depends on the opportunity to contact the right publishers and the ability to negotiate better deals. However, due to the high exclusivity of programmatic direct companies should be ready to put money on the table.

Programmatic direct is one of the main methods to buy premium inventory. This means that you are going to sign a deal with the certain website or mobile app. Before signing an IO you better know everything about their audience and make sure you want to target exactly the previous identified users. That means you have to know your market and your potential customer base really well. If you do know your audience, programmatic direct will match you with the right mobile users and make your ad campaign successful, though very expensive one.

Since this is an advertiser-publisher direct deal, it gives almost full control for both, buyers and sellers. Usually, the terms of the deals are transparent and advertisers have deeper insights on their campaign performance. You might ask: “It all sounds great, why do we need to consider other options?” The answer is given by its price. Direct deals are pretty expensive and not every company can allow themselves to allocate such a high budget for every ad campaign. So usually they consider open auctions and PMPs.

What is your advertising campaign goal?

First things first: define your advertising campaign goal!
In case you want to reach out new audience, learn their behavior and open new opportunities to push your brand awareness – try to bid on the open auction. Since open exchanges have millions of different publishers they give you the opportunity to advertise your product to the mass. Usually, during the campaign you can see the campaign performance result almost in the real-time, like on Adello Direct self-reporting dashboard. Thus, based on constantly updating information, you can adjust different filters, like age, gender, interests, and target narrow audience. The self-reporting platform allows you to narrow audience based on their location, interests, demographic feature etc.

If you have a very specific product/services and want to be sure your ad is not shown for random audience you might want to choose some specific publishers. Often PMPs may offer you bundled deals which combine websites and mobile apps with certain audience. Bundled deals promise you a certain rate or value, for example viewrate, CTR, certain gender or age. However, you have to be careful, since you cannot know for sure where they pull the information from. Also, in some cases pushing for a certain goal (for example high viewrate) doesn’t help the overall performance of the campaign, because there are might be hidden tricks behind.

Performance Outcome Quality over Performance Output

For example, the ad is only shown on low quality apps that enforce you to watch the ad or it is only shown on tablets, so the ad will be seen, but appears quite small etc. Thus, the value might seem high, but it doesn’t boost your campaign performance at all. If your main interest is about performance outcome quality and not about performance output, this will be a crucial point to consider.

You also should be attentive to the bundle list as included publishers may not meet the requirements. For example, this one:

Here you can select specific audience, for instance, 18+ but if you open the list of apps available/targeted, you might be surprised:

What is your campaign budget?

The main advantage of open exchanges is its prices. Media inventory from open auction is always cheaper than from PMP. Always. At least twice. RTB allows you to bid on individual impressions rather than agreeing to a predetermined fixed price. So, buying in real time on the open market might save your budget and still help you to achieve your campaign target.

Prices on the private auction depend on the publisher. If the PMP have a lot of bidder invited to its private auction the price can be much higher than the defined floorprice. However, if there aren’t many competitors the price can be close to the floorprice. There was a time when PMP was mainly used to allow clients book from the specific premium publisher. However, it’s not the case anymore. Yes, usually, premium publishers are trying to sell their best ad space as expensive as possible. But if it’s hard to find buyers they will try to sell the inventory via other channels.

It is like a waterfall, programmatic guaranteed is the first one that can buy/bid on the traffic and then it goes down to preferred deals, private auctions and so on till the open market. Thus, the open market is the last one that can bid on the premium impressions, but it still can. Maybe you will not get the most viewable ad space on the website/app, but maybe second or third, without paying premium price.In conclusion, it’s hard to judge what market is better since they serve different needs of advertisers. However, in case you are new in the industry, or want to bring your programmatic in-house and manage campaigns yourself you might want to start with the open market and use the broader opportunities for A-B Testing. Easy platforms such as Adello’s Adello Direct self-service advertising platform allow advertisers and brands to set up campaigns fast with full transparency on their budget and media buy. The platform’s main focus is to explore different opportunities, learn about audience behavior and filter campaign settings to achieve overall higher performance.

Taking GDPR and Cookies-Free policy into account

The difference between RTB, PMP and Programmatic Direct were explained in detail. How do the different programmatic models apply to the regulations by EU privacy? Adello’s recent report of the Swiss advertising market reveiled that GDPR does have a significant influence on advertising spendings. Amongst 250 people that participated in the survey, an increasing number of advertisers recognize that “customers are more aware of privacy concerns” and “the industry is seeking for cookies-free advertising solutions”.

Whilst the digital advertising industry has to tackle the shift towards programmatic buying it also has to upcome the necessary demands in terms of cookie-free advertising to meet EU-privacy law regulations in the meantime. It was about time!

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