5 Reasons to Ditch Programmatic for Private Marketplaces

5 Reasons to Ditch Programmatic
for Private Marketplaces
As a long-time CEO in
digital advertising, what
I’m about to say may
seem sacrilegious to my
contemporaries: Advertisers need to
spend less budget on programmatic.
Programmatic advertising changed
the game by allowing marketers
to reach consumers on thousands
of sites without human interaction,
offering millions of impressions.
However, programmatic has recently
shown chinks in its armor. It has
become synonymous with remnant
inventory and fraudulent ad traffic,
which WPP projects will cost brands
$16.4 billion in 2017. It’s also led to a
YouTube ad boycott and a GuardianRubicon Project lawsuit.
To avoid the pitfalls of
programmatic, more companies
are turning to private marketplaces
(PMP). PMP can be self-service
like open exchanges, but it’s an
invitation-only marketplace with
a limited number of sites offering
premium inventory from world-class
publishers. Here are the top five
reasons to pivot to PMP:
1
Avoid Remnant Inventory
Open exchanges work with
thousands of publishers and promise
millions of impressions, but brands
will not know the exact sites on which
their ads will run. PMP uses the same
automated buying technology, but
has a controlled number of highquality publishers. This means the
advertiser will know exactly where
their ads will appear. JPMorgan Chase
recently decided it wanted more
human oversight and went from
having ads on 400,000 websites to
5,000 websites. Even after reducing
ad placement by 395,000 websites,
ROI improved. Why? Higher-quality
ad inventory on reputable digital
properties.
2Exclusive Inventory with
World-class Publishers
PMP media companies often have
exclusive deals with reputable
publishers. Not all PMP companies
are alike, and advertisers should
find out which direct-to-publisher
relationships the company has before
agreeing to partner with them. After
finding the right partner for your
target audience, you will receive a
Deal ID, which is akin to a VIP pass
to some of the best websites and
placements. While you watch your
high-performing ad campaign in real
time, your competitor will likely stand
outside the virtual velvet-rope. This is
one of the major benefits of working
with PMPs.
3Brand Safety
AT&T is the latest company to halt
advertising with Google after its ads
ran with a YouTube video promoting
terrorism. While YouTube, Google
and Facebook get most of the blame,
these sites are just the tip of the
iceberg. When advertisers work with
PMP companies, they know exactly
where their ads will appear and can
prevent them from running next to
abhorrent content.
4Less Bots and Fraud Traffic
In 2016, 30% of the $27 billion
spent on open exchanges was on
invalid traffic (IVT), compared with
nearly 10% in PMP. For multinational
organizations, that percentage
difference can mean wasting billions of
dollars. While the industry is currently
unable to eradicate IVT, advertisers
should only work with PMP companies
that include terms in their contracts
that state that clients will not be
charged for any impressions classified
as IVT by companies such as Moat or
Integral Ad Science.
5The Highest ROI
PMP allows advertisers to see
which sites are performing well
and make real-time adjustments
to capitalize on the best sites.
Incorporating channels such as
connected TV and digital out of
home, advertisers are seeing higher
ROI. KitchenAid, which recently ran a
PMP campaign across eight channels
for its Mini Mixer, saw a 468% brand
lift in purchase intent measured
by Nielsen. The industry average
measured by Nielsen is an 8.4% lift.
Programmatic has changed the game.
As with all progress, unforeseen
issues and unintended consequences
tend to follow. More companies are
finding that the premium inventory
available in PMPs is safer, and they are
maximizing ad ROI.
—TOM ALEXANDER
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