Publishers: Why Private Premium Exchanges are Best for You

Advertisers jumped on the idea of ad exchanges when they first came to the market. But for publishers, the advent of exchanges only meant a way of taking remnant impressions and selling them off at the best price they could get. Many leading brands don’t want to be “seen” in the space available; they want to be seen in quality outlets. Brands need a place to buy ads against premium content.

Enter private exchanges, open only to high quality, brand safe, content driven, trusted publishers. Many private exchanges have gotten a lot of press because they talk about limiting the sites that can join –- which is a good step forward.  However, at the end of the day these “private exchanges” are simply auctioning off remnant impressions using Real Time Bidding, just like today’s remnant exchanges.

A Premium Exchange is a private exchange that goes even further. In addition to restricting sites, it actually changes the way inventory is sold, to better match the way brand advertisers buy.  Brand advertisers want a high level of transparency and control of where and when their ads run. They are willing to pay a small premium for this. Premium exchanges bring both high quality brand safe sites to advertisers and also sell that inventory on a guaranteed basis as required for a brand media plan.

The Publisher Perspective

Publishers want:

• High fill rates
• High percentage of good CPM campaigns
• Good ad quality
• No competition with the publisher’s sales reps

Here’s how new premium ad exchanges stack up against traditional d networks in meeting publisher needs:

1. Fill Rates

Premium Exchanges limit whom they target to high quality brand advertisers. Ad Networks also sell to performance advertisers. So the ad networks will have better fill rates, though at a lower CPM (see below).

Networks win.

2. CPMs

Ad networks find some high quality brand advertisers that will pay the publisher good CPMs but sell most to performance advertisers who pay low CPMs.  Premium Exchanges are different. They are built to appeal only to brand advertisers.  100% of their campaigns will be sold to brand advertisers who pay the higher price to get ease of use, transparency and control over when and where their ads run. So Premium Exchanges get publishers higher CPMs.

Premium Exchanges win.

3. Ad quality

Publishers want high quality ads to appear on their sites. They love to see BMW or Lego ads on their site but hate to see diet ads.  Premium Exchanges like ZINC Exchange are designed for premium brand advertisers only. Ad quality is therefore be high.

Premium Exchanges win here, too.

4. Conflict with Publisher Sales Reps

Publishers hate seeing a quality advertiser buy from a remnant network because they found a lower price there.

Premium Exchanges, however, do not compete with the sales team. Premium Exchanges sell the same guaranteed inventory that the sales reps sell AND they sell it at the same price as the sales team. So there is no conflict. In fact a Premium Exchange allows a publisher’s sales rep to find more advertisers. So from a Publisher’s perspective,  it’s more desirable for their sales team to partner with Premium Exchanges.

Premium Exchanges beat ad networks 3-1

Overall publishers love most things about Premium Exchanges – except the fill rate. Yet, over time as more agencies and local advertisers see how easy it is to buy from an Exchange, the fill rates will climb. Premium Exchanges are a godsend to any publisher with high quality content. However they won’t be much use to low value UGC inventory sites who aren’t allowed onto these private exchanges.

Ad networks may be seriously damaged or killed off by Premium Exchanges. The remnant exchanges took a lot of their high volume low priced business. Now, Premium Exchanges are taking their high priced business too. Networks are getting squeezed on both ends and will have to fight for survival.