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Private marketplaces provide tools for broadcasters and media buyers

Private Marketplace, SSPs and DSPs: A Streamlined Process

February 26th, 2016   ||    by Susan Kuchinskas

The automation of buying and selling television advertising through a private marketplace—Programmatic TV—is taking off. These marketplaces automate much of the labor of selling and scheduling ads while using data to target ads and track performance. According to AdAge, Magna Global estimates programmatic buying via marketplaces and ad exchanges will account for 4 percent of TV budgets in the United States in 2016 and increase to 17 percent by 2019.

Role of Platforms: SSPs and DSPs

Within a private marketplace for programmatic TV, advertisers use their own data and that of broadcasters to determine which spots will deliver the desired audience at the best price. They then bid against each other for inventory—in milliseconds. Because advertisers want to make the most of their ad spends, ad exchanges may tend to drive prices down. However, broadcasters want the highest price for their inventory. It’s a dance between broadcasters and advertisers as both aim to deliver relevant ads to the right audience at the right price.

To achieve their goals, both broadcasters and media buyers need different tools, and they often use intermediary technology to manage the automated buying and selling. Broadcasters use supply-side platforms (SSPs), also known as sell-side platforms, to get the best prices for their inventory sold through ad exchanges. On the flip side, demand-side platforms (DSPs) are used by agencies and other ad buyers to buy impressions on ad exchanges as cheaply and efficiently as possible.

Within the ad exchange itself, a lot goes on. In a process known as real-time bidding, multiple DSPs may submit their bids for inventory, along with the proposed ad, to one or more SSPs. On the selling side, SSPs pick the highest bid and serve the ad, and all of this automated negotiation happens in near-real time.

Private Marketplaces

While the underlying auction technology is usually similar among SSPs and DSPs, the interfaces and tools available may be quite different. Therefore, an SSP is likely to have more robust features specifically designed for broadcasters. SSPs allow broadcasters to do the following:

  • Segment audiences using internal and third-party data
  • Increase the value of inventory by measuring audience attention and engagement
  • Optimize yield by demonstrating the performance of content to advertisers
  • Simplify and automate workflows
  • View reports on ad performance

A broadcaster’s SSP may connect with multiple ad exchanges and marketplaces, allowing the broadcaster to put inventory up to bid to the widest audience of advertisers. SSPs also help broadcasters counter the tendency of ad exchanges to drive prices down. Using an SSP, broadcasters can set minimum prices and refuse certain ad types or reject certain advertisers.

In fact, some SSPs are by invitation only. In these private marketplaces, preferred advertisers or agencies are invited to buy through the publisher’s platform. Private marketplaces are most often used to sell premium inventory at higher prices than the publisher could get from an open ad exchange. Instead of simply seeking the lowest price, media buyers can take advantage of aggregated data from various data partners in order to make smarter buying decisions.

Though there is an increase in convenience for media buyers from automating the buying process for premium inventory, a private marketplace does not eliminate the need for broadcasters to sell inventory through DSPs. Online publishers have used SSPs for years to sell display, video, and mobile ads, but the use by TV networks and station groups is new—and continues to grow.

For more information about the ins and outs of private marketplaces, contact Videa.

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