PROGRAmmATIC

types of programmatic deals: a guide

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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 

 

homer excited price is right GIF

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

 

sold auction GIF by David

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

 

Nicksplat Vip GIF by Hey Arnold

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

 

one hundred kc GIF by Kim's Convenience

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. 

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