PROGRAmmATIC
types of programmatic deals: a guide
The term Programmatic is widely used in the digital advertising world and is synonymous with RTB or Real Time Bidding. However, Programmatic has evolved over the last few years and it is important to distinguish between the ever growing list of acronyms and ways in which you can buy or sell digital advertising. To put it simply, RTB is not Programmatic, but rather the protocol and just one of the ways in which advertising is bought programmatically.
In general, there are 4 main types of Programmatic deals that advertisers can buy or sell with:
Each of these deal types have their pros and cons, with the advent of GDPR and other brand safety scandals so brands are increasingly looking to gain more control and transparency. We’ll explore below a bit more on each to help you decide which is the best deal type for your brand.
Open Auction (RTB)
Also known as: Open exchange, open market-place, real-time bidding
Who can buy: All eligible buyers on a platform
Real-time bidding (RTB) is the protocol that enables the buying and selling of digital ad inventory through auctions, facilitated by ad exchanges or DSP and SSPs. In the open marketplace, RTB impressions are available to all bidders, however publishers can control floor prices and who/what categories of advertisers can bid on their inventory.
Pros
- Open market and can get more scale
- Readily available in DSPs for targeting
- Control for publishers
Cons
- No guarantee you can buy the placement you want
- Lower ROI for publishers in general
Private Auction (PMP)
Also known as: Closed auction, private auction, invitation-only auction
Who can buy: Only invited buyers are allowed
These are customized and invite-only marketplaces, where the buyer and seller can negotiate inventory packages. These packages are often more “premium” and can contain publishers’ 1st party data or additional page level targetting that is not applied in Open exchange.
Pros
- Smaller pool of brands competing for a placement
- Transparency on what you are buying
Cons
- CPMs tend to be higher
- Still not guaranteed to win the placement
Preferred Deal (PD)
Also known as: Spot buying, private access, unreserved fixed rate
Who can buy: One buyer
Preferred deals bypass the auctions and offer a buyer a fixed price to purchase inventory. Giving the buyer exclusive “first-look” access to inventory and guaranteeing a spot.
Pros
- Guaranteed inventory if floor price is met
- Transparency on what you are buying
- Fixed pricing
Cons
- CPMs tend to be higher
- Inventory volume is not guaranteed
Programmatic Guaranteed (PG)
Also known as: Programmatic guaranteed/direct/premium/reserved
Who can buy: One buyer
A non-auction-based approach where volumes and pricing are agreed upfront with publishers. As the seller and buyer deal directly, the volumes and price are guaranteed on both sides.
Does this sound a lot like traditional media buying? Yes! However, with Programmatic guaranteed deals, the process is streamlined and automated via RFPs on the platforms to a certain extent.
Pros
- Exclusive inventory
- Transparency and control
- Guaranteed volumes to buyer and seller
Cons
- High CPMs
- Minimum budgets and commitment terms
- Increased resources required to set up
Summary
Which type of Programmatic deals you use typically will depend on your marketing goals and budgets. Below is a summary of the 4 types we discussed for further reference:
If you would like to find out more about specific deals for your brand, get in touch with our team today for a consultation.
