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Private exchanges: driving competition for your inventory

SpotxchangeFollowing the news that Google is making pre-roll video inventory available on YouTube via RTB(Real-Time Bidding), Andrew Moore, European MD of SpotXchange, looks at the impact of RTB for video and the opportunity new entrants in the market are creating for publishers to create private marketplaces and drive increased competition for their inventory.

Andrew MooreAndrew Moore
In the online advertising industry, private marketplaces are becoming the topic of the day as publishers look to find a way to respond to the increasing requests from advertisers to make their inventory available via RTB. Video is no different and with the development of video-enabled DSPs and Agency Trading Desks, demand for video inventory via RTB is growing exponentially. The challenge for most publishers is how and when do they respond to this call without sacrificing control over their inventory or yields. Video Exchanges have been the first to respond, with SpotXchange being the first video marketplace to be fully RTB-enabled and Google recently announcing that it plans to make pre-roll inventory available on YouTube via RTB. The key question now is how will premium video publishers respond to this changing dynamic in the marketplace as programmatic buying across all digital channels grows in significance? Typically, the demand for premium video inventory is high with few publishers needing a strategy for remnant inventory. Maintaining control remains key and increasingly private marketplaces look well placed to provide an effective solution to protect yield and avoid channel conflict. A private marketplace is simply an agreement where a publisher allows select advertising partners to access their inventory via an RTB integration. Within this agreement, the publisher maintains control over availability, floor pricing and volume. Critically, the publisher maintains the direct relationship with the buyer and therefore can use RTB access to drive greater spend. This arrangement works well for premium publishers that have both a high demand for their inventory and a strong brand proposition to run a stand-alone marketplace. As the market moves towards programmatic buying, and advertisers increasingly look to target audiences in real-time across a wide range of publishers, demand for premium video inventory will remain high. A recent study by PubMatic / Digiday showed that 74% of brand advertisers polled would increase RTB budgets if they had direct access to publisher inventory via RTB. Publishers who are able to capitalise on this shift towards RTB will benefit from early mover advantage - they will develop the skills and knowledge to compete effectively in this new world ahead of the market. Creating multiple layers of demand for inventory has always been key to driving yield; establishing a private marketplace simply adds to this without causing channel conflict – the publisher is in control of the end-to-end process. By making inventory available in a private marketplace - where multiple buyers are competing for each impression - publishers can structure their inventory at multiple price points to maximise yield across their portfolio. Ultimately RTB will impact on all areas of online display and increasingly, video will be bought in this way. Therefore, we at SpotXchange believe this change in the market represents a real opportunity for publishers to take the lead at a time when advertisers are looking to build partnerships related to video advertising. SpotXchange is an Associate Member of AOP.

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