Private Marketplace Deals, Billed as More Premium, Have Nearly as Much Made-For-Advertising Inventory

Private marketplace (PMP) deals have been billed as a way for publishers and buyers to transact more directly, without the problems of the programmatic supply chain. But multiple recent data points reveal that despite their premium reputation, private deals contain the same low-quality media that populate the rest of the open internet. The Association of National Advertisers’ June transparency report found that 14% of spend running in private marketplace deals went to made-for-advertising sites, a relatively-recently classified group of publishers that exist only to make money from advertising and not to serve readers. That’s only a little less than the open marketplace, where 19% of spend goes to MFA sites, the ANA report found. What's more, CPMs for PMPs were double the price of open marketplace impressions, the ANA found more recently, said Tim Brown, CEO of ad-tech firm Fiducia, part of the group which researched the report. The finding is part of the ANA’s additional research efforts for their follow-up transparency report, set to be released in October. Made for Advertising Sites Are Programmatic’s Latest Boogeyman “There is a perception from advertisers that [PMPs] are better, and they’re certainly more expensive,” Brown said. “The direct publisher PMPs are still very good and a value for money, but there are a whole bunch of other PMPs that ... don’t meet the quality expectations.” Following the ANA report, the industry has coalesced around MFA as a scourge to remove. Supply-side platforms (SSPs) like PubMatic and Sharethrough removed the inventory from auction packages and PMPs, respectively. Sharethrough removed MFAs shortly before the ANA's report. GroupM, the largest media buying agency in the world, announced Monday it was taking new precautions to avoid buying from MFA sites. As the industry looks for new solutions to identify and purge MFA, there is less attention on how older programmatic solutions, like private marketplaces, haven’t been able to solve one of the oldest challenges of the internet: money flowing to scammy publishers instead of legitimate ones. Not all PMPs are created equal Private marketplace deals generally mean any deal transacted outside of the open auction. Within this group, there are two types: deals between one buyer and one publisher and deals between a buyer and multiple publishers, usually either curated by an SSP or a third-party ad-tech firm. It's the latter where buyers need to be more wary of low-quality inventory, said Paul Bannister, chief strategy officer at publisher network Raptive. “[The first kind] requires more work to get scale because you have to work with more publishers,” Bannister said. “[The other category] you have to work really hard to get quality. It feels like it's easier, but it’s a different kind of work.” To track the presence of made-for-advertising inventory in private deals, Jounce Media, which has been working with GroupM and ad-tech firms to help identify MFA websites, studied 172 multi-seller web deal IDs targeted in the past 90 days, which represented 42% of the total sample of private marketplaces in that time period. Multi-seller PMPs mean that they contain multiple publishers. Jounce found 80%, or 138, of those multi-seller marketplaces, contained MFA inventory. What's more, MFA inventory in these marketplaces ultimately commanded an average of 5% of spend, though for some buyers, as much as 75% of the budget was spent on MFA inventory. How PMPs got filled with MFA SSPs, as frequent curators of multi-seller PMPs, are the ones ultimately putting MFA websites in PMPs. “For a long time, SSPs were packaging deals that were like the open market but priced higher,” Bannister said, noting there is more scrutiny on the practice now. While some SSPs might be looking to juice margins, curating a PMP can be challenging, depending on buyers’ goals. For a PMP focused on targeting pet owners or on high viewability, an MFA website might look like a reasonable choice, said Chris Kane, founder of Jounce Media. “[SSPs could] have good intentions and bundle a bunch of garbage inventory into a private marketplace,” Kane said. YouTube Ad Buyers Unknowingly Targeted Kids Despite Requests to Avoid Sharethrough’s PMPs and off-the-shelf deals contained 9% MFA inventory before removing the websites in June. Having seen data last year on MFA sites not leading to good marketing outcomes spurred the decision to purge MFA inventory, said chief product officer Curt Larson. Previously, it didn’t feel like the ad-tech firm’s place to do this expulsion. “These sites look bad, but am I here to exclude bad-looking sites?” Larson said. “Is that my job to police bad user experiences?” The industry still doesn’t have a common definition for made-for-advertising or a one-button tool to avoid it. But, in the interim, Kane said buyers keen to avoid MFA can still use PMPs, provided they are direct with a publisher or designed by thoughtful exchanges. But there is a risk that solutions to prevent MFA will not be durable enough to stop bad actors. After all, many buyers sought PMPs that were high viewability, seeing the metric as a proxy for quality, and then PMPs became full of highly viewable, low-quality sites, Larson said. “All of these industry trends tend to follow: problem develops, nonstandard solutions and standard solutions are developed, and bad actors find a new way to game the system,” Larson said. This article has been updated to reflect that Sharethrough removed MFAs before the ANA's report was released.