By Gareth Holmes, UK Publisher Director at PubMatic

Publishers are finally facing up to the reality of the audience-driven, automated buying scenario that has been rapidly embraced by leading digitial advertisers and agencies. In response, larger publishers are creating their own private exchanges and/or audience extension offerings. In their desire to maintain some kind of control of a programmatic future, there are private exchanges for dozens of premium publishers like Condé Nast and The Weather Channel.

However, while these exchanges create liquidity, they do little to maintain premium value, add value to relationships with the best buyers and increase margins for the seller. There just aren’t any technology controls built into the strategy for the publisher or publishers to truly get the best value for their inventory. Market anecdotes we hear are that private exchanges are still primarily monetising remnant impressions, while premium inventory is walled-off to be sold directly. Additionally, such complex business deals need systems to manage cost effectiveness and automation to keep up with the latest developments of the tech side. You can’t just make a deal and expect it to bring you the world of advertising purely through blind technology.

Is there an alternative? PubMatic believe we need Private Marketplaces – not Private Exchanges. PubMatic’s inventory monetisation and unified sales platform for direct and indirect sales is where publishers can designate certain DSPs, Agency Trading Desks, agencies and/or advertisers to enter into a private group in a one-to-one, mutually-transparent relationship for the sale of select inventory based on business rules and associations. Yes, the business deal can be cost effective and automatically traded with transparent controls, while supporting seller and buyer transactions in real-time for mutual performance enhancements. NBC News.com is among the PubMatic clients who have begun using Private Marketplace as part of their sales strategy.

Brand marketers do care where their inventory is placed, and we still hear too many stories about ads being placed in absolutely wrong environments through programmatic buying and ad networks dragging their feet on producing site lists. Buyers want to know what they are buying and premium publishers should be rewarded for their premium content/contextual value, brand equity, established audiences, historical use of inventory sales packaging and pricing models that have enabled successes to date.

In Private Marketplaces, only those two entities who agree to engage see pricing and where the inventory is placed. Most importantly of all, the PubMatic Private Marketplace has an entire robust range of controls so that publishers can dial up and down relationships as their business changes. The tool also allows for precise business rules and a flexible inventory packaging user interface to manage and execute on programmatic direct relationships. These business rules include packaging inventory for select buyers, various buyer combinations of DSP, ATD, Agencies and Advertisers and pricing controls per deal.

The PubMatic Private Marketplace then ties into what we call a "Unified Optimization Engine" where programmatic direct and indirect relationships are optimised. This brings balance to not only the programmatically-sold inventory landscape, but to all of the publisher sales channels. Publishers can actually determine and act upon where they will get the most value for each impression: through the private marketplace, or through direct sold inventory. Ultimately, publishers balance sales channels and sales relationships, while brands and agencies maintain publisher relationships with access to premium inventory on all levels.

Private Exchanges tend to create another silo within the publisher operation, whereas a private marketplace -- along with unified optimization – breaks down the walls between people and machine-sold, guaranteed and non-guaranteed, transparent and blinded inventory. The PubMatic Private Marketplace is where our publishers automate the sale of all ranges of inventory, and are finding that some of it indeed can be sold at higher prices by machine than through salespeople. The essence of a Private Marketplace is matching the right seller to the right buyer so that the buyer gets the best possible inventory and meets their campaign KPIs, while the seller gets the full and actual value of that inventory. For too long it’s all been about giving control to the buyers, but with something like PubMatic’s Private Marketplace, publishers can once again lead the future of digital advertising sales models.