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There are 4 types of buying in programmatic. The first is Open Auction, via Exchanges like Doubleclick Ad Exchange (AdX), Appnexus, Rubicon, etc. Second way of buying is via a PMP (Private Market Place); and here we can divide the type of buying in two: a Private Auction where the more advertisers are bidding at the same time, but only by invitation, or a Preferred Deal where you are bidding at a fix price. The 4th way to buy programmatic is via a Guaranteed Deal, where the publisher provides inventory to a single advertiser and the advertiser needs to buy 100% of the inventory in a negotiated price.
What are the differences between Open Auction and the Private Auctions?
- There are premium publishers that limit the access to the inventory to some advertisers or agencies, as by doing that, they have a better control over the CPM and a direct contact with advertisers.
- Not all premium publishers have their urls as transparent on Open Auction, what this means is that only the inventory they could not sell on Private Auction is left for Open Exchange, and if the URL is not transparent, advertisers lose the power to control on which site they are bidding and the option to optimize for performance. Because of this, the open auction inventory normally is cheaper than the one available via PMP.
- Bigger publishers are now putting in competition their department of sales, direct programmatic (when there is a PMP), and multiple exchanges (via header bidding). The differences on Programmatic Open RTB and Private Auction / Buying are being fade out then, where the higher bid response will win the auction. Except when there is a guaranteed deal, via programmatic or via direct sales (on the publisher adserver/SSP).
- Sometimes Publishers with a niche market (finance, for example), will block the direct advertisers or even the category of their business (finance) to advertise on their websites on open auction, forcing the advertisers to do direct deals. This allows publishers to have a control on the relation and to push for higher CPM’s and more sales.
- There are walled gardens in programmatic, like Yotube inventory, where the access can only be done via Adwords (Google Display Network – GDN) or via DBM (Doubleclick Bid Manager). The difference between those buying platforms are targetings, bidding and reporting. But both platforms are in competition for the same inventory on Open Auction. There are however some Premium Youtube Inventory like Vevo, where it is only possible to buy via a negotiated PMP.