Deals 101: Understanding the Deals Landscape
This is the first post in our educational Deals Series. For the next few weeks, we’ll be posting articles from different AppNexians on how publishers can succeed with deals. This week, AppNexus Director of Marketplace Management Ben Kneen breaks down the deals landscape and gives publishers three tips to get started.
Deals are one of the most effective ways for publishers to package and sell their most valuable inventory, while also building deeper relationships with buyers. Just last year, the AppNexus platform saw over $500 million in spend on Deal IDs, shattering our 2016 total.
Private marketplaces are mainstream these days, so publishers aren’t asking us about how they work or why they should sell through a private market – instead, they’re focused on how to get started or how to improve their packaging to sell more through deals. In this post, we wanted to share a few best practices we see from the most successful, yield-maximizing private marketplaces on the platform.
3 tips for getting started with deals
Deals are all about adding value for buyers. No matter what the exact terms are, a successful deal enables publishers to capture more value from their inventory by improving buyer performance. The publishers building the largest private exchange businesses follow a few tried and tested strategies:
1. Source prospects from your open exchange activity
The most likely prospects for your private marketplace are already spending on your site – you can mine those buyer reports to help target your sales efforts. Ask them what else you can offer that would make your inventory more valuable to them, and start negotiating terms. Even if they don’t end up buying from you, the conversations can guide your deals strategy moving forward – you might discover new ways to add value you haven’t even thought of yet.
Keep in mind that you won’t be able to find every prospect on the open exchange – many buyers, for instance, buy exclusively on private marketplaces. We’ll get into some strategies to reach those buyers later in the series.
2. Differentiate your deal offerings from the open exchange
Let’s call out the elephant in the room - in the past few years, many buyers adopted a strategy to shift budgets into private marketplaces, and often did so haphazardly. Some publishers found they could sell plain vanilla, run of network inventory through a deal with no difference from what they offered in the open exchange and charge a premium, simply because the transaction happened through a deal. Stick your head in the sand if you like, but this isn’t a sustainable long-term strategy that creates value for buyers. We’re seeing a mass migration away from these deal types at AppNexus.
The most successful publishers understand that product differentiation drives yield and structure their deals offering accordingly. Here are a few packaging strategies you can consider:
- More data: Contextual and user-based data adds value. Consider packaging event-driven content like, say, sports content in the lead-up to a championship game, or offering access to broad user demographic targets such as new home buyers or moms.
- Access to exclusive inventory. Many publishers will use a Deal ID to sell distinct inventory that’s not available on the open exchange. For instance, a publisher might opt to sell flashy large canvass ad sizes on its Arts & Entertainment section to movie & TV buyers through deals.
- Special auction dynamics. Publishers can also offer buyers more favorable auction mechanics, such as lower floors or priority in the auction as part of a Deal ID. This is a great way for publishers to give strategic partners an incentive to spend more, and increase fill.
There are plenty of other ways to add value through deals, but these are three of the most common. The most important thing is to make sure the inventory you offer through deals creates incremental value for buyers compared to what you’re selling on the open exchange.
3. Grab the reins
Many publishers are content to come up with a few Deal IDs and lean on their SSP sell them on their behalf. To maximize revenue though, publishers need to take an active role and control the sales strategy for their deals. After all, no one knows what makes your site uniquely valuable better than you do, which means no one is as qualified as you to pitch your deals. If you want to move dollars to higher value sales channels and build that sales muscle for new offerings like programmatic guaranteed, you can’t afford to stay on the sidelines.
Following these tips will help you lay the foundation for a successful deals business, but that’s just the beginning. Over the next couple of weeks, we’ll be posting more blogs on different aspects of deals, such as pricing, merchandising, and analytics strategy, so be sure to check back! In the meantime, contact us here if you’d like to learn more about how AppNexus can help you succeed with deals.