Three roadblocks to PMPs in Southeast Asia

Three roadblocks to private marketplaces in Southeast Asia

09 Jul 2018

Could private marketplaces (PMPs) be the saving grace for a programmatic industry that has inadvertently become a race to the bottom? CtrlShift’s Dominic Loh highlights current barriers to PMP adoption in the region.

Could private marketplaces (PMPs) be the saving grace for a programmatic industry that has inadvertently become a race to the bottom?

PMPs, an invite-only marketplace where premium publishers offer their ad inventory to advertisers, is still a fairly new but exciting topic in Southeast Asia. And one that seems designed for marketers that care about what data is used and where their ads are going – putting quality over the quantity which open marketplaces offer.

For a marketer that wants to make this shift to quality, it is important to first consider where PMP deals fit in their full funnel-marketing picture. What this means is evaluating PMP with other elements such as social, search or even retargeting.

For example, through sensitivity or effectiveness tests we have found that once we included PMP deals into campaigns, this has led to lower CPL’s (cost per lead) across the campaign. While keeping the parameters constant, once PMP deals were removed, it led to higher CPL’s. We also saw search quality improving when PMP deals were introduced.

Imagine the consumer journey or conversion path analysis, where a user sees an ad on a premium site like The Star (adding credibility to the campaign) and then later sees the same ad on Facebook prompting a click-through to the advertisers site. After some time has passed, the consumer ultimately decides to make a search for the product through Google and finally converts with a purchase.

Programmatic has evolved the way we buy media and campaigns are typically broken down into two phases – Prospecting to bring the new customers, retargeting to close the loop. A PMP can be utilized for both phases, by leveraging publisher data to prospect the very best of customers and then retargeting across multi channels to close the loop be it Facebook, programmatic display or otherwise.

Recent reports from eMarketer indicate that PMP and programmatic direct methods of buying are in line to overtake openRTB marketplaces in terms of ad spend, indicating market maturity and how quality will overtake quantity in the long run for programmatic buyers.

Sadly Southeast Asia is still playing catch up as the industry in the region needs to overcome some obstacles before PMP adoption can accelerate and find its place in more than a handful of bran’s media strategies. There are three key barriers:

1) “Low-cost mentality”

A key challenge is advertiser resistance due to a “low-cost mentality”. When it comes to programmatic inventory,  the cost of media from PMPs can be 3-5 times higher than that from open marketplaces. When we all started our programmatic journey, low-cost inventory at scale was a key driver for adoption. This made sense of course, but as we’ve seen from the current issues faced by brands in mature markets around brand safety, industry conversations have turned to media quality and the subsequent rise of PMPs where scale is finally available.  

2) Resource and expertise still lacking

From an agency perspective, educating clients on the benefits of prioritizing quality over quantity can be challenging. Engineering a shift in mentality can be an arduous process and the easy route is to maintain status quo and continue to buy cheap. Having internal programmatic trading resources and expertise is key as the inclusion of PMP in the buying strategy will require time and effort to fully optimize.

3) Attribution

Attribution remains a challenge even for the most digitally savvy brands and markets. In Southeast Asia, attribution remains a fairly expensive piece of the programmatic stack despite its role in delivering better insights to marketing efforts. Marketers need to justify spends and proper attribution set up will help ease and verify the gains to be had with the transition from quantity to quality via PMPs.

These roadblocks are not easy to overcome but thankfully our industry is a fast moving one and the journey has just begun. It won’t be too long before Southeast Asia is on par with more mature markets.

To get there, it is important for advertisers to understand and remember that the transition from open to private is a journey. It’s about finding out what data works and what inventory works. Retargeting or prospecting, identify the key outcomes and optimize towards those goals.

There is no doubt that PMPs have already found their place in the programmatic world, but to ensure they live up to their full potential in our ecosystem, it’s up to everyone including clients, agencies and publishers to buy in with the right mindset.

Dominic Loh is Manager, Audience Strategy, Product & Partnership Management at CtrlShift.

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