The Rise of Private Marketplaces - a Solution to the Cookiepocalypse
White Paper | Author: Ibrahim Merican, Magnite
Digital advertising is facing an identity crisis due to Google's announcement to deprecate third-party cookies on Google Chrome and Google Advertising ID (GAID) on Android by 2024.
For both publishers and advertisers, this poses a significant challenge, given how both sides of the industry rely on them.
While proposed (bird-themed) solutions such as FLoC, FLEDGE and TURTLEDOVE have taken centre stage in the press, there is an alternative that's been around for years and often overlooked -– private marketplaces (PMPs).
In fact, a recent global survey by DoubleVerify (DV) found that 45% of 600 respondents believe that PMPs hold the greatest promise to replace our existing cookie-dependent solutions.
What are PMPs?
Private marketplaces (PMPs) are customisable, invitation-only marketplaces where premium publishers make their inventory and audience available to select buyers, oftentimes transacted through the use of deal IDs.
Given the exclusive nature and tight collaboration between publishers and advertisers for PMPs to occur, it unlocks many benefits for both publishers and advertisers.
Publishers can gain increased advertiser ad quality, control of inventory pricing and secure demand. Meanwhile, advertisers can buy inventory from their direct owner, access exclusive publisher first-party data, targeting and ad formats and minimise ad fraud and brand safety risk.
PMPs Place In A Cookieless world
PMPs main advantage for advertisers is their ability to accurately and precisely target specific consumers with the right offering or message. Not being able to precisely target a particular consumer - a key benefit of digital advertising - will no doubt be a huge hurdle for advertisers to overcome and ensure their budgets are spent wisely.
Having said that, precise targeting is still possible as long as advertisers leverage first-party data in their campaigns. This does not have to be restricted to advertisers’ first-party data, which can often be limited in scale. Advertisers can leverage their media partner’s first-party data, especially those from publishers who provide ad opportunities and have a direct relationship with consumers. Publishers are uniquely positioned to spot trends, identify audiences and segment them as part of their unique value proposition in a privacy-compliant and cookie/ID-resilient manner. Such publisher first-party data activations often come in the form of PMPs which is not new to the industry.
Challenge
While first-party publisher data sounds attractive, the biggest challenge is the lack of standardisation to make PMP truly a scalable and viable option for advertisers to adopt. This is where Seller Defined Audiences (SDAs), an outcome of the IAB Tech Lab’s global Project Rearc initiative, come into play to address this challenge.
SDAs enable publishers to communicate first-party audience attributes in an OpenRTB bid without revealing user identities. Publishers are required to segment their users into one or more of the IAB’s Audience & Content Taxonomy categories. First-party behavioural and contextual signals are mapped to those taxonomies and curated into audience cohorts.
SDA is the evolution of siloed publisher first-party data activation and has the potential to enable PMPs to be a key solution for the industry in the cookieless and ID-less world.
Conclusion
In the pursuit of a new and alternative solution in a digital advertising world without cookies and IDs, we may have unintentionally overlooked a solution that already exists – PMPs. It may not be perfect now, but it addresses advertisers' key concern, which is to precisely target the right consumer.
