Why Are Private Marketplaces (PMPs) So Hot Right Now?

Posted by AdEx Network on June 28th, 2019

Insights

Crash course in digital advertising history

The digital advertising industry is а relatively new one and it’s evolving really fast.

It all began on October 27, 1994, when Wired Magazine, known as hotwired.com back then, published a small message by AT&T in a box on their website:

It was an advertisement for AT&T in 1994, and people clicked on it like crazy. It was an advertisement for AT&T in 1994, and people clicked on it like crazy.

This is what most agree to be the first banner on the world wide web. The following years thousands of websites started selling inventory but it was kind of a “Wild West” until 1996 when ad networks like DoubleClick started appearing.

Doubleclick: The first ad network. Powerful enough to survive the Dot-com bubble Doubleclick: The first ad network. Powerful enough to survive the Dot-com bubble

Ad networks tried to coordinate ads and publishers and even introduced reporting and measurement of ROI. For a few years the industry continued developing and ad networks became the standard, until advertisers and publishers and users on the Internet simply became too many for them to handle.

They were then replaced by DSPs, SSPs, ad exchanges and RTB — which are the status quo up even today.

Do you remember this 90s website where you could buy 1 pixel for $1? If you enjoyed this super short history of Internet advertising, check [this article](https://www.adpushup.com/blog/the-history-of-online-advertising/) Do you remember this 90s website where you could buy 1 pixel for $1? If you enjoyed this super short history of Internet advertising, check this article

However, all these solutions come with a certain array of inefficiencies — and as a recent article on headerbiding.co points out, every major step in the evolution of digital advertising is triggered by the need to solve these inefficiencies.

Take for example RTB and ad exchanges. This is how digital ads work today, but there are huge unsolved problems present with this model — lack of control over ad inventory and publishers, ad fraud, wrong targeting and matching of advertisers and publishers, hidden vendor fees.

And this is how we arrive to Private Marketplaces

As the digital industry looks for a solution to ad fraud, more sellers and buyers tend to engage in a private marketplace where only high-quality publishers provide their ad inventory to selected advertisers. — headerbidding.co

Many experts consider PMPs to be the next thing in digital advertising, yet it’s a really simple concept — PMPs are basically small ad networks in which advertisers and publishers get in “invite-only”, inventory on publishers’ website is mostly exclusive and the publishers themselves have control over what they are showing to their audience. Advertisers, on the other hand, can be sure that their ads are broadcast to relevant audiences. Usually, CPM is higher on PMPs, but advertisers have higher ROI from the premium inventory they are buying on relevant media for their audience. In some ways PMPs allow contextual advertising too — another rising trend with the recently growing privacy concerns in the industry. PMPs, however, don’t exclude programmatic and forms of real-time bidding — demand is usually picked on auctions.

Is AdEx a private marketplace for digital advertising?

We don’t like putting labels on ourselves, after all we like to call ourselves unicorns, but we believe that AdEx Network has all the good features of a private marketplace:

  • For the moment, AdEx is open to selected publishers and advertisers. This guarantees quality traffic and better targeting for advertisers and possibly higher CPM for publishers. Anyway, this will soon change, since we would like AdEx to be accessible for everyone.
  • Оn AdEx Network, publishers have full control over their ad space and can observe the demand.
  • Both advertisers and publishers can “whitelist” and “blacklist” other parties.
  • Instead of relying on sales teams, publishers can connect with AdEx to make their inventory available to the selected advertisers.
  • AdEx offers brands the opportunity to have clear control over where their ads are being displayed instead of being placed everywhere.
  • AdEx mitigates ad fraud (see how here) and possibly offers higher ROI for advertisers.

So, is AdEx a PMP? Well, we still prefer “unicorn”.

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