2022 Trend Alert: Private vs. Open Exchange Deals

Industry Trends

2022 Trend Alert: Private vs. Open Exchange Deals

3 Minute Read |

Carrie Pittman

Carrie Pittman
Head of Marketing

Welcome to our Trend Alert series! We recently published our 2022 Global Advertising Trends report, and will be sharing insights, data, and trendy topics from the report in this newest blog series. This week, we’re taking a look at the trend towards private exchange deals, and why they can help publishers and marketers achieve their goals.

First of All: What Are Private Exchange Deals?

Private Exchange deals are programmatic, real-time bidding deals that can demand partners can only access using a unique deal ID. Private exchanges are known by many names, and are sometimes called Private Marketplace (PMP), PMP Programmatic, Private Auction, Invitation-Only Auction.

What are Private Exchange Deals?

Publishers get to pick who to invite to the auction. A single publisher hand-chooses a small selection of relevant marketers, advertisers, brands, and/or DSPs to participate in the auction.

In order to access this auction, the selected participants must use a time-sensitive deal ID. Publishers set a floor price, and the bidding starts at the floor price. The highest bid wins, and inventory isn’t guaranteed.

Why Are Private Exchange Deals Trending?

Private exchanges offer a great alternative to open exchanges. Inventory quality tends to be better, placements can be more contextually aligned to reach relevant audiences, and they also tend to yield higher eCPMs for publishers. For publishers and marketers alike, there are many pros to private exchange deals:

For Advertisers, Reach the Right Audience via Privacy-Compliant Context Clues

Private exchange deals give demand partners access to premium inventory, which is well worth the premium. Marketers tend to love the contextual alignment opportunities that private exchanges offer. Why? Because reaching audiences based on the context of the site, show, or app that they’re engaging with does not rely on personal identifiers. This means that private exchanges can help marketers reach relevant audiences without compromising user privacy.

Plus, aligning ad content with page content makes it more likely for users to engage with the ad, or to have it resonate with viewers.

For Publishers, Invite Relevant Advertisers to a Programmatic Private Exchange and Boost eCPM

Private exchanges offer publishers a unique opportunity to auction their premium inventory to a hand-selected group of marketers and advertisers. One of the key advantages to private exchange deals for publishers is the opportunity to increase revenue and boost eCPMs.

On the Smaato Platform, for example, we see that private exchange deals tend to outperform open exchange deals. The eCPMs for OTT/CTV inventory, for example, are significantly higher for private exchange vs. open exchange deals:

Indexed eCPM for OTT/CTV Inventory
click to enlarge

Additionally, private exchanges help publishers deliver a more relevant and seamless user or viewer experience. With private exchange deals, publishers get to pick which demand partners get to bid. As a result, publishers can choose contextually relevant advertisers to participate, which can deliver a better experience and can also help improve brand sentiment.

Read the 2022 Global Advertising Trends Report

It’s no wonder private exchanges are outpacing open exchange deals and have become the darling of the programmatic auction world.

Download your free copy of our 2022 Global Advertising Trends Report to get more great insights into trending topics to help inform your advertising and monetization strategies. Plus, enjoy insights into Smaato’s platform performance YoY, and learn new ways to reach audiences around the world and on any device.

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