How publishers sell their ad inventory to buyers?
Publishers are using four ways to sell their inventory, and through that process, the yield managers are continuously trying to bring CPM’s and revenue up.
Direct sales / IO sale
Nowadays many publishers have two teams: the direct sales team and the programmatic teams. The direct sales team is focused on direct sales or in the IO business. These teams usually work directly with agencies and brands bringing the revenue via high CPMs and priority deals.
As programmatic evolves, the direct sales in-house team are more and more focused on negotiating high-priority ads, such as sponsorships, full-page takeovers, and custom creative integrations. According to Google, there is also a way of selling ads called “share-of-voice” ads, that give advertisers a certain share of the page views on your site.
Programmatic guaranteed is a similar model of direct sales / IO business where ad tech is automatic the negotiation and sales of publisher inventory, simplifying the process and reducing the potential for human error. Buyer and seller agree on a price, a volume, and terms. Then the buyer will buy 100% of the inventory made available on those terms from the publisher. Publishers can define a frequency and include audience lists on programmatic guaranteed. The fee on programmatic guaranteed can be higher than the direct sales, as both publisher and buyer are paying ssp and dsp fees. On direct sales business there will be only the adserver fee.
Open Auction / Exchange Bidding / Header Bidding / Resellers
Small publishers use Google AdSense or other ad networks, like native. When publishers start to have volume, generally after 500,000 pages views per month, they will get access to more opportunities, like header bidding/exchange bidding, where third-party exchanges engage in a unified real-time auction.
Google says that by “allowing multiple exchanges to compete with each other, publishers can make more money for their inventory while maintaining some control over ad quality.”
In Open auction, all advertisers are bidding for a user and specific ad placement, and all this happens in real time. Most significant publishers have their volume sold via open auction, while premium and niche publisher find ways to sell most of their inventory via programmatic guaranteed or direct sales.
Private marketplaces (PMPs)
PMPs can be private auctions, preferred deals/fixed price deals. Private auctions give a select group of buyers access to inventory before it becomes available in the open auction.
Preferred deals bypass auctions, with the publisher cutting a deal at a fixed price with one specific buyer.
Trading desks and advertisers opt to use PMPs in order to have direct auctions with the publisher. PMPs are also useful to troubleshoot as buyers have a better understanding of the inventory available (bid requests) and the bid responses (the auctions where the buyers tried to buy).