Did you know that, according to Statista, more than half of the real-time bidding ad spend in the UK in 2021 went to PMPs? Also, ad spending on PMPs is growing three times faster than on open exchanges. Isn’t that unbelievable? They’re becoming more popular, and stats like these prove it.
But honestly, have you ever heard about PMPs? And how much do you know about PMP deals? Do you understand how they work, and do you see the difference between, for example, PMP vs. PG deals?
If not, no worries—you’re in the right place! This article has everything you need to understand PMP deals and how they work.
Table of contents
What Are PMP Deals?
A private marketplace (PMP) is a platform where publishers invite a limited group of advertisers to auction (invite-only auction) for top spots on their websites or apps. Thus, PMP falls under real-time bidding (RTB) and combines programmatic efficiency with direct deal exclusivity.
So, from this information, we can now define PMP deals:
A PMP deal (private marketplace deal) is a real-time bidding (RTB) auction in which a publisher sells premium inventory to a limited group of buyers.
For years, open exchange was the prevalent method in programmatic advertising. However, in recent times, PMPs have become the preferred choice for ad spending, earning popularity for their more targeted and premium approach.
How PMP Deals Work
Again, to understand how PMP deals work, we need to examine two main concepts: first, what makes PMP deals different from traditional methods like open exchanges, and second, what Deal IDs are and how they fit into PMPs.
- In an open exchange, advertisers bid on ad space in real-time, but anyone can join in, which can lead to random ad placements and lower-quality ads. However, only selected advertisers can bid with PMPs, and they need a deal ID to do so, making the process more controlled and exclusive.
- A Deal ID, or a Deal Identifier, is a unique 19-character number (like 9971778803207884517) created by a publisher’s ad server or supply-side platform (SSP) for each ad inventory package. This ID helps buyers and sellers identify who can join the auction or bid on specific ad space.
Now, once we understand all the terms involved, here’s how it works:
The publisher and advertiser agree on aspects like pricing, the banner sizes, and the target audience. Once everything is set, a unique Deal ID is created, and it acts like a pass, allowing the advertiser to bid on the publisher’s ad space.
The bidding still happens in real-time, but only the selected advertisers can participate. This means there’s less competition, and advertisers have a better chance of getting their ads in prime spots.
When a user visits the publisher’s site, the ad server sends an ad request. This request, tagged with the Deal ID, is sent only to the invited advertisers through demand-side platforms (DSPs). Advertisers respond by placing their bids in real-time based on the agreed terms and the user’s profile. The highest bid that meets the agreed terms wins the auction, and the corresponding ad is displayed to the user.
If you want a more practical approach, here’s a concrete example:
Let’s say you run a fashion company. You’ve noticed a popular fashion website perfect for reaching your audience. Instead of competing with tons of other advertisers, you approach the site to set up a PMP deal.
The publishers’ team offers a special arrangement: you get first dibs on their best ad spots, like their homepage banner and top articles. To make this happen, they give you a Deal ID.
With the Deal ID in place, your ads have a prime chance of being shown every time someone in your target audience visits the site.
PMP Deals vs. PG Deals
Private Marketplace Deals
- Require an invitation to participate;
- Have a minimum price set by the seller;
- Don’t guarantee specific trading volumes.
Programmatic Guaranteed Deals
- Involve one-on-one trading between buyer and seller;
- Have a fixed price;
- Guarantee specific trading volumes.
But now, you may wonder if there’s any difference between PMP and PG deals, right? The straightforward answer is “yes,” and below is how.
From the above sections, you know that PMP deals are exclusive auctions in which only certain advertisers are invited to bid on a publisher’s ad space. Publishers control who can participate and usually set the rules for pricing and targeting.
While the space is not guaranteed, it offers more privacy and transparency than regular open auctions. The process involves bidding, so the final price can vary depending on demand.
PG deals, on the other hand, are more like a straightforward agreement between an advertiser and a publisher. Here, the advertiser is promised a certain number of ad impressions at a fixed price.
There’s no auction involved, and everything is agreed upon in advance, so the advertiser knows what they’re getting. This deal offers more predictability and certainty, as the inventory is guaranteed, and the price is fixed.
By comparison, PMP deals offer more flexibility and exclusivity with auction-based pricing, but there’s no guarantee of getting the ad space. PG deals, however, are more direct and dependable, with guaranteed space and fixed pricing, making them more predictable but less flexible in terms of pricing and inventory availability.
PMP vs. RTB
As we’ve already mentioned, both Real-Time Bidding and Private Marketplace are part of programmatic advertising, but PMP is actually a subset of RTB—or, to put it another way, it falls under the umbrella of RTB.
That’s why there isn’t much to say when discussing PMP vs. RTB; they focus on slightly different aspects. However, we can still point out some essential differences.
- RTB is like an open auction where anyone can bid on ad space in real-time. It’s flexible and gives advertisers access to many different types of inventories, both premium and not-so-premium. It’s great for reaching a large audience quickly.
- PMP is a more exclusive version of RTB. Only a select group of invited advertisers can bid on inventory, and the deals are often worked out ahead of time. This means advertisers get access to higher-quality, premium inventory, but it’s less open and more controlled.
So, PMP is just a more exclusive and controlled version of RTB, where you get better inventory but with fewer advertisers involved.
Why Choose PMP Deals for Your Business?
For Publishers
- Increased Revenue – Premium inventory often brings higher CPMs, generating better ad revenue.
- Control Over Ad Sales – Publishers can choose which advertisers access their inventory, ensuring that only trusted buyers are involved.
- Exclusive Partnerships – PMP deals encourage long-term relationships with advertisers, leading to repeat business and stable revenue streams.
- Curated, Premium Ads – Publishers can showcase their most valuable inventory to specific advertisers interested in their premium offerings.
For Advertisers
- Access to Premium Inventory – Place ads in front of a more relevant, engaged audience with high-quality inventory.
- Less Competition – With fewer participants in the auction, PMP deals offer better chances of securing top ad placements than open RTB auctions.
- More Control – Pre-negotiated terms provide greater control over pricing and ad placements, optimizing strategies for advertisers.
- Improved ROI – PMP deals’ exclusivity and higher quality tend to lead to better engagement and higher conversions.
Shared Reasons to Choose PMP Deals for Both Publishers and Advertisers
- Transparency – Both advertisers and publishers benefit from clear visibility on purchased inventory, pricing, and displayed creatives, ensuring a transparent process.
- Stronger Brand Safety – Trusted, curated environments help protect advertisers by ensuring ads are displayed in safe contexts. Publishers can also ensure that ads align with their content and audience with control over which ads are displayed.
- Programmatic Efficiency – New buys can be set up and activated quickly across top-tier websites or specific verticals, streamlining campaign management.
- Industry Adoption – PMP deals are now widely available on major programmatic exchanges, becoming an industry standard.
- Reduced Need for Direct-Sales Teams – Technology-driven PMP deals can reduce the reliance on direct sales teams, offering a more efficient way to manage campaigns.
FAQ
Publishers need to partner with a monetization provider that connects them to a network of advertisers. They must establish relationships, negotiate deal terms, and ensure they have the necessary technical setup for the auction.
Publishers struggle with bidders exploiting fixed pricing by opting for cheaper open auctions and face significant sales overhead from the time and effort needed to set up and manage PMP deals.
Advertisers often face limited PMP inventory due to reserved deals or excessive targeting, which reduces scale. Additionally, while PMPs offer some protection against fraud, advanced bots can still bypass detection, posing a risk.
There are different types of programmatic deals, such as Real-Time Bidding (RTB), Private Marketplace (PMP), Programmatic Direct, and Preferred Deals. You can read more about these in our dedicated article on types of programmatic advertising.
Final Thoughts
As we can see with the naked eye, PMP deals are quickly gaining traction in the AdTech industry. And with more advertisers shifting their focus from open exchanges to PMPs, it’s clear they offer something valuable.
The shift is driven by the need for better tools that make setting up and managing PMPs easier, along with the growing importance of first-party data as third-party cookies fade away.
PMPs allow advertisers and publishers to target more effectively, offer better control, and ensure higher-quality placements, all of which make them appealing options.
We hope this has helped clarify PMP deals and why they’re becoming an essential part of modern advertising strategies.
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