How Does a DSP (Demand-Side Platform) Purchase Ads? (Part 2) - Groundhog MI

Following the previous article introducing RTB, Direct Deals, and Programmatic Direct advertising transaction methods, how does a DSP (Demand-Side Platform) purchase ads? This article will continue to explore other Private Marketplace (PMP) advertising purchasing methods.

PMP (Private Marketplaces) operates through an exclusive invitation mechanism, meaning only advertisers invited by the media can participate in ad transactions. Media outlets typically reserve premium ad placements for PMP deals. Advertisers still need to bid via RTB, but the competition is limited to invited advertisers only. Although PMP prices are generally higher than those in the Open Auction, advertisers can better ensure their ads are displayed on trusted media platforms. Establishing long-term partnerships in this environment can also enhance the stability of ad placements.

In the previous article, we covered common Programmatic Direct methods within the PMP market, such as Programmatic Guaranteed and Preferred Deals. This article focuses on Private Auction and First-Look Deal purchasing methods.

Private Auction
First-Look Deal

1. Private Auction

A Private Auction is an invitation-only programmatic advertising bidding method. Only advertisers invited by the media can participate via RTB, reducing excessive competition and increasing the chances of acquiring high-quality ad inventory.

Key Features of Private Auction:

Invitation Required: Advertisers cannot freely access the market or directly participate in bidding; media approval is necessary for entry into a Private Auction.
Media-Set Floor Price: Publishers can set a minimum price to ensure ad revenue meets expectations.
Flexible Bidding by Advertisers: Advertisers can place bids via RTB and adjust them according to their budget, though competition with other invited bidders remains.
Higher Prices than Open Auction: Due to the premium quality of inventory and limited competition, CPM is typically higher than in the Open Auction.
Enhanced Brand Safety: Media outlets can screen advertisers to prevent ads from appearing in inappropriate placements.

2. First-Look Deal

A First-Look Deal grants specific advertisers the opportunity to view inventory before it enters the open market, allowing them to decide whether to purchase it prior to RTB bidding. When a new ad placement becomes available, invited advertisers have the first chance to buy. If they decline, the ad slot then enters the RTB auction.

Key Features of First-Look Deal:

Pre-Market Purchasing Advantage: Advertisers can purchase at a fixed price without competing in a bid, avoiding the uncertainties of RTB auctions.
Non-Guaranteed Impressions: Access to ad inventory is not guaranteed; purchase opportunities arise only when the publisher has available resources.
Higher Pricing: Due to the priority access, publishers typically set higher prices, and CPM may exceed RTB rates.
Unsold Inventory Flows into Open Market: If the advertiser chooses not to buy, the ad slot moves to RTB, where it may be acquired at a lower price by other bidders.
Ideal for High-Exposure Campaigns: Best suited for brand advertisers seeking premium placements and guaranteed exposure volume.

3. Private Auction vs. First-Look Deal

Feature	Private Auction	First-Look Deal
Transaction Method	Invited advertisers bid through RTB	Advertisers have priority purchasing rights at a fixed price
Price	Higher than the open market, but still requires bidding	Fixed price, usually high
Brand Awareness Stability	High	High
Number of Competitors	Few invited advertisers participate	Only advertisers with priority rights
Flexibility	Prices fluctuate with market competition	Decision required within a limited time frame
Guaranteed Impressions	No	No

These two articles provide a brief introduction to advertising transaction methods. If you would like to learn more about the relationship between DSPs and advertising, feel free to contact us through the form below:

Groundhog Technologies