4 ways to maximize your revenue with PMP deals
As a publisher, one of your biggest concerns is the financial viability of your website.
After all, content creation, hosting, and expanding your tech stack costs money, and you need to be compensated for all of it. While most publishers start earning ad revenue through open exchanges like Google AdX, these exchanges often result in low CPM rates and cutthroat competition. Worse, the advertising on your website might not match your audience well in terms of demographics and interests. In turn, these factors often lead to low ROI for both advertisers and publishers.
How can publishers fight back?
With a private marketplace, it’s much easier to transact on the right inventory once you’ve found the right advertisers. In this article, we’ll look at ways to use PMP advertising to maximize your revenue.
Why do PMP deals help maximize revenue?
With PMP advertising, your ad space inventory is privately offered to pre-approved, curated advertisers. In other words, unlike the open auction, your inventory isn’t offered to just anyone. This lets you set a premium rate for your exclusive inventory while ensuring that the potential ad creatives used are relevant to your audience. You also avoid objectionable material getting posted on your website.
The private marketplace grants transparency
Here’s how this works in practice. With PMP advertising, select advertisers can get a first look at your ad inventory. They will look at factors such as:
- Page content and context.
- User attributes (including geography, device type, etc.).
- If third-party or first-party cookies are present.
Typically, PMP deals are already associated with a specific domain or a set of domains. By the time an advertiser views a specific PMP deal, they’ve already approved the domain, as well as the path to that domain. As such, this ensures that the traffic is not fraudulent.
On the publisher’s end, they will look into the advertisers’ audience objectives to see if it aligns with their content. From here, publishers have the ability to curate a list of advertisers they’d like to work with. This boosts ROI on both sides: pricing for publishers, brand safety, and response rates for the advertiser.
PMP advertising deals are more exclusive
Finally, the private marketplace makes your advertising space a more exclusive commodity because of the increase in publisher and advertiser choice.
Let’s think about what happens during the open auction from an advertiser’s perspective.
Advertisers looking to purchase advertising space on the open auction are less concerned about your specific website and are more interested in their target audience attributes. Their goal is to ensure that their ads show up on websites that their users frequent. In this case, the advertiser is looking to pay less for an impression by purchasing it on any website their audience visits, resulting in a lower CPM for you.
However, advertisers interested in purchasing advertisements through a PMP deal are looking to get the first look at premium or contextually-relevant inventory. Or, they’re looking to access exclusive inventory that is not readily available on ad exchanges.
In any event, most of us will pay a premium for a better product, and this is a similar phenomenon. On the other hand, the open auction is like a flea market or discount store run: you get what they have.
How to maximize your revenue with PMP deals
1. Know your audience
First, it’s critical that you know about your audience’s demographics and interests. While your website likely appeals to a certain niche, many different kinds of people can be interested in the content you produce. For instance, a lifestyle blog may appeal to,
- Young mothers interested in meal prep tips.
- Individuals focused on traveling during the pandemic.
- Retirees looking for simple ideas to renovate their homes.
Each of these demographics has different interests in terms of advertising.
This is how you are able to know what your monthly traffic volume looks like, what your most popular content is, where users spend the most time, and finally, what sources drive the largest amount of traffic to your website.
Don’t be discouraged if your traffic volume pales in comparison to the likes of Digiday. Advertisers are interested in a brand fit. Does your content contextually match against their target audience? That is the question you always need to ask yourself before setting up any type of programmatic deal.
Leveraging a Customer Data Platform or Data Management Platform will also allow you to better understand your audience through collecting first-party declared data. Alternatively, you can combine your data with third-party data points to see what your audience demographics are.
2. Understand your competition
Besides the data on your own website, it’s helpful to know how you stack up against competitors. If your website is one of the top destinations for your niche, then advertisers may be willing to pay more of a premium through PMP advertising. On the flip side, if there is too much competition then you might have less bargaining power in the private marketplace. Values for advertising inventory are very market sensitive.
3. Master the seasonal differences
Like many other commodities, PMP programmatic advertising commands different CPMs depending on the time of year. In general, publishers see more revenue during the second half of the year compared to the first. Holidays, budget considerations, and other market forces drive sales during this time, where advertisers want to be more visible.
4. Make a win-win proposal
Finally, to maximize your PMP advertising revenue, make advertisers a fair deal. It’s important to maximize your revenue in a way that’s fair to both sides: If your price floor is too high, then there’s a healthy chance that advertisers will skip you.
Or, as we mentioned earlier, the advertiser may set up a PMP deal, only to choose not to spend through it. As a result, you may have to sell your remaining inventory for a lower CPM on the open market or have unused inventory. Neither of these is in your best interest economically.
On the contrary, if you set a price that’s too low on the private marketplace, you’re leaving money on the table. Advertisers won’t pay more than they need to get the impressions, but if you have a good case for your pricing, they’ll often pay. Even with PMP programmatic ads, advertisers are trying to maximize ROI.
Likewise, if you price your impressions too cheaply, advertisers may think that you are less effective as a publisher. It’s similar to buying a cheap t-shirt from the dollar store, versus picking one up at the department store. Most people don’t expect the dollar store shirt to last long and expect to buy a new one soon. Conversely, a reasonably-priced department store t-shirt will last for years, giving better overall value.
By offering the right advertising at the right price, you make PMP advertising work well for both parties.
How do you locate advertisers?
It’s one thing to know about proper pricing, and another to find the right advertisers. That’s why most major publishers have a dedicated advertising sales team. These professionals reach out to potential advertisers and offer them the opportunity to bid on the advertising inventory they control.
A dedicated team has the time to research advertisers in the right niche, then cultivate the relationship. For instance, a personal finance website will actively look for advertisers that may want to sell financial products to their audience. If their website demographic is young, they’ll probably target student loan refinance providers, credit card companies that accept customers with short credit histories, and similar companies. Meanwhile, a website that caters to older customers might pitch to life insurance companies and retirement plan peddlers.
How do you set PMP deals up?
Finally, there needs to be a place to set up the deals.
Most publishers use Google Ad Manager. This is usually the easiest way to get a programmatic PMP deal active on your website. With Ad Manager, you can set up a private auction. Here, you can set a minimum CPM floor price and invite select advertisers to bid on your inventory. The advertiser must place a valid bid above the minimum floor price to enter the private auction. Otherwise, the inventory is sent to the open auction. After the inventory is sold, no further configuration is needed. Simply review the creatives coming through to ensure brand safety.
The first step to optimizing your PMP deals is to understand your website’s audience. Next, analyze and get a handle on the general competition for your advertising inventory. It can be challenging to get an advertiser to agree to a PMP. However, if done right, this practice maximizes your revenue potential and promotes the best value for advertisers.