Programmatic New Market [3]Programmatic Advertising Transactions: A Comprehensive Overview ~ Dentsu Inc. Private Marketplace (PMP) ~
This third installment aims to organize the programmatic domain. RTB, private auctions, programmatic direct. Web advertising is a parade of acronyms and katakana terms, and unfortunately, the programmatic domain is arguably the prime example. While I've had more opportunities to discuss Dentsu Inc. PMP and programmatic, it's certainly not uncommon for people to feel something akin to aversion towards this specialized vocabulary.
I often wonder if there aren't simpler terms available, but the difficulty of memorizing terminology doesn't necessarily correlate with the complexity of the concepts themselves. In the programmatic space, what matters isn't rote memorization of jargon, but understanding the concepts – concepts that are actually quite straightforward to grasp. This article aims to clearly explain programmatic advertising transactions, their classifications, and how they position themselves relative to other advertising formats.
[0] What is Programmatic? (Premise)
Fundamentally, it refers to advertising transactions conducted using systems on the ad delivery side (DSP) and systems on the ad inventory supply side (SSP). Details in #1.
【1】Types of Programmatic Advertising Transactions
① Whether Traded via Auction or Not
Here, "auction" refers to RTB (Real-Time Bidding). Transactions where an auction occurs every time an ad is displayed are called "RTB," while transactions without an auction per ad impression are called "Programmatic Direct." Since "Direct" typically refers to pure advertising, interpreting "Programmatic Direct" as "Programmatic Pure Advertising" clarifies its distinction from RTB.
Furthermore, because auctions occur in RTB, the cost per impression fluctuates (CPM is unfixed). In contrast, Programmatic Direct does not involve auctions, so the cost per impression remains fixed (CPM is fixed).
Based on the above, RTB and Programmatic Direct can be summarized as follows:
② Whether anyone can participate in the auction
RTB can be categorized into two types: "open auctions" accessible to all, and "private auctions" open only to a limited number of advertisers. In Private Auctions, a limited number of bidders participate in auctions at or above a minimum bid price set by each publisher (only a floor price is set, and the CPM price fluctuates). This bidding format is called a floor price.
③ Is inventory guaranteed or not?
Further subdivided into two categories based on whether the duration and impression count are guaranteed. Considering that Programmatic Direct inherently involves a fixed CPM, Programmatic Guaranteed is a transaction where the CPM, duration, and total impressions (equivalent to the budget) are all predetermined like a traditional ad placement. In contrast, a Preferred Deal is a transaction where only the CPM is fixed, while the duration and impression count are not guaranteed.
*While IAB materials include "Programmatic Direct" as part of "Programmatic (Automated) Guaranteed," this article references the simpler tree structure used by eMarketer ( e.g., slide 5 here ).
【2】Comparison of Programmatic Direct and RTB
① Media Mapping
A key feature of Programmatic Direct is the ability to deliver programmatic ads while controlling not just the "surface" of ad placement but the specific "slot" itself. This enables advertisers to target high-value slots while delivering ads, reducing various risks related to ad delivery reliability that are a concern with RTB.
② Ad Priority
Programmatic Direct allows for priority ad buying over RTB. Specifically, when Programmatic Direct bids on a specific ad request for a given slot, RTB cannot purchase that ad (though this may vary depending on ad server/SSP settings).
Furthermore, within RTB, Private Auctions have higher priority for ad buying than Open Auctions. Therefore, if an ad is purchased via a Private Auction, it generally cannot be purchased via an Open Auction.
[3] Scope of Dentsu Inc. PMP
This article has detailed web advertising within the programmatic domain, yet the term "PMP" has not been used once. The meaning of the word "PMP" often varies significantly depending on the person or vendor using it; some refer to Private Auctions as PMP, while others refer to Preferred Deals as PMP.
"Dentsu Inc. PMP" is intended to mean "a private marketplace optimized for advertisers, provided by Dentsu Inc.," and does not refer to a specific programmatic transaction format. While the transaction format itself is primarily Programmatic Direct, "Dentsu Inc. PMP" does not refer solely to this format. It encompasses the entire solution: fully leveraging this format to provide advertisers with optimal ad placements and audience data in the best possible form. The key challenge—and thus the primary mission of "Dentsu Inc. PMP"—is how to build this solution in collaboration with publishers while simultaneously ensuring it becomes a long-term, sustainable effort that effectively returns value to publishers.
While there are many significant challenges, we aim to make steady progress toward achieving the goals outlined below, which we publish in every issue.
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Author
Ryota Murayama
TVer Inc.
After joining Dentsu Inc., he served as Head of the President's Office at VOYAGE GROUP Inc. before assuming his current position. At TVer Inc., he oversees the establishment of management foundations, organizational operations and improvement, and the formulation and execution of business strategies. He strives daily to achieve TVer Inc.'s organizational development and further realize discontinuous growth in both its services and business. Author of <a href="https://www.shoeisha.co.jp/book/detail/9784798160696" target="blank">"Digital Single</a>."
