Understanding the differences between an open marketplace and a private marketplace is critical to determining which of these real-time bidding auctions will work best to help you achieve your programmatic advertising campaign goals.
Programmatic ad buying is disrupting the world of digital marketing for very good reasons. It’s data-based, making it far more efficient, targeted and scalable than the traditional method of buying digital advertising, which requires requests for proposals, quotes and negotiation.
Programmatic, or automated, ad buying saves time and money. Because it relies on data and algorithms, it provides marketers a sophisticated way to place advertising and drive impressions at scale with a level of transparency never before possible.
You can see exactly where your ads are showing up, do a deep dive into the audiences interacting with your ads and, because everything is happening in real time, you can adapt and improve your ads exactly when those changes will have the most impact, driving a better return on investment for marketing initiatives and strong results for brands.
The benefits are clear but to be successful using programmatic advertising, it’s important for marketers to understand the platforms where ad buying deals happen.
Open and private marketplaces, also known as open and private ad exchanges, connect publishers and buyers on a single virtual platform offering an efficient way to buy and sell ad inventory. For advertisers, buying ad space on an ad exchange eliminates the need to deal with different publishers one-on-one and provides access to ad space across a range of digital sites.
Postmedia understands the ins and outs of open and private marketplaces and what marketers need to know to drive impact for their brands.
Understanding the programmatic advertising marketplace
What are ad exchanges?
An ad exchange is a digital marketplace where publishers (in this case website and app owners) and advertisers come together to buy and sell display, video or mobile ads programmatically across a range of channels (websites, mobile sites and mobile apps). Transactions happen in milliseconds through real-time bidding. Whenever a user visits a digital site, a bid request goes out to an ad exchange.
Ad exchanges make buying and selling digital ads more transparent, optimize the buying process and maximize profits. Advanced algorithms allow publishers to sell advertising space to the highest bidder and advertisers to reach high-intent audiences with the content they need when they need it.
Benefits of ad exchanges for marketers and advertisers
- Expanded ad reach: Marketers have access to a wide range of publishers, extending ad reach.
- Cost-effective, immediate ad placement: Real-time bidding allows advertisers to bid on impressions as they become available.
- Precise targeting: Marketers can target based on demographics, behaviour and location.
- Transparency: Marketers know exactly where their ads are being placed, improving effectiveness.
- Insightful analytics: Advertisers get real-time metrics to better understand and optimize performance and return on investment.
Open marketplaces vs. private marketplaces
What is an open marketplace?
An open programmatic advertising marketplace, or open ad exchange, is an inclusive, virtual marketplace that leverages automation, AI and machine learning to offer public, real-time bidding auctions. It is open to advertisers and publishers of all sizes looking to buy and sell advertising space. This means ad inventory is available to a large, diverse group of media buyers.
These ad exchanges are the go-to platforms for advertisers who want to expand their reach. However, the opportunity to connect with a much larger audience also comes with the challenge standing among a big list of competitors, which can lead to less visibility and reduced sales.
Benefits of open ad exchanges
Publishers and advertisers who choose to take part in open marketplace auctions benefit from:
- Wide exposure and access to a massive number of potential buyers and sellers.
- Increased ability to reach the right users and grow sales.
- Improved efficiency and cost-savings when scaling ad campaigns.
- Control over pricing.
What is a private marketplace?
A private ad exchange, or private marketplace, is a closed platform run by publishers where premium ad inventory is sold using a subset of real-time bidding to a hand-picked group of buyers. In this case, the publishers choose which advertisers can have access to their ad space. In addition to selecting who can participate, publishers also set bid prices and terms.
Private marketplaces make the most sense for advertisers with larger budgets trying to reach a highly targeted audience. This exclusivity is also one of the biggest challenges posed by private marketplaces, which by design have limited reach and opportunities for growth.
Benefits of private ad exchanges
Publishers and advertisers who choose to buy and sell in private marketplaces benefit from:
- The ability to combine the efficiencies of programmatic advertising with the exclusivity of direct deals.
- Increased prices for publishers for their premium space.
- The ability for advertisers to place their ads on coveted, premium space.
Working with an open or private marketplace can help drive results. The key is to use the model that best meets your marketing objectives and budget.
