In the fast-paced world of programmatic advertising, not all deals are created equal. Whether you’re a publisher looking for premium inventory or a publisher aiming to maximize ad revenue, understanding the nuances of different programmatic deal types is key to making smarter decisions.
Each programmatic deal type — open auction, private exchange, preferred deals, and programmatic guaranteed — offers unique advantages. Some prioritize flexibility and scale, while others focus on control and transparency.
In this guide, we’ll break down the pros and cons of each deal type, helping you navigate the programmatic ecosystem with confidence.
Overview: RTB vs. direct deals
The four main ways of offering and acquiring inventory in the programmatic ecosystem are: open auctions, private exchanges, preferred deals, and programmatic guaranteed deals. Follow the flow chart below for an overview of the different methods each deal uses to sell ad inventory.
Real-time bidding (RTB)
Open auction
Also known as: open exchange, real-time bidding (RTB), open marketplace
As the name suggests, open auctions are open to all. All marketers on the exchange/SSP/ad network have an opportunity to bid on all available publisher inventory. This is the most traditional form of programmatic auctions.
With real-time bidding, publishers can set the minimum floor price per thousand ad impressions (eCPM). Demand partners can then bid on this inventory, and the highest bid wins. Inventory is not guaranteed.
Private exchange
Also known as: private marketplace (PMP), PMP programmatic, private auction, invitation-only auction
A private exchange is another form of real-time bidding, but instead of all available inventory being open to all potential buyers, a single publisher invites a mere handful of buyers to participate.
To access the auction, these hand-selected advertisers will need a time-sensitive deal ID. Publishers set a floor price, and the bidding starts there. As in the open auction, the highest bid wins. Inventory is not guaranteed.
Programmatic direct
Preferred deal
Also known as: unreserved fixed rate, programmatic non-guaranteed
A preferred deal is a private, 1:1 relationship between a publisher and an advertiser. In a preferred deal, publishers offer premium inventory to the advertiser at a pre-negotiated fixed eCPM price.
While eCPMs are a bit higher, advertisers are paying to get what’s essentially “first dibs” on premium ad space. When an ad request comes through, the advertiser with a preferred deal has an opportunity to bid at the pre-negotiated fixed eCPM price in real time, before the inventory heads to open auction. Inventory is not guaranteed.
Programmatic guaranteed
Also known as: guaranteed buy, programmatic direct, automated guaranteed
With a guaranteed buy, a publisher offers specific, reserved inventory to an advertiser at a fixed price.
Publishers and advertisers negotiate a price for a guaranteed volume of impressions. This is similar to a direct sale/buy, but programmatic automation replaces the manual IO process, improving efficiency and reducing error.
Benefits of each programmatic buy type
Each type of programmatic deal has its own unique benefits. Picking the right one depends on your unique inventory or campaign requirements. Here are the strengths of each auction type:
Benefits of open auctions
- Affordability: This is the most cost-effective way for advertisers to buy ad inventory — offering access to the largest audience and providing the highest reach for campaigns.
- Efficiency: By casting a wide net, publishers can quickly fill their inventory. They can also include remnant inventory that wouldn’t be sold in preferred deals or private auctions.
- Simplicity: While risk is (theoretically) higher, this method is efficient and convenient for both publishers and marketers.
- Scalability: The open auction provides one-stop access to a large number of advertising sources. This means nearly unlimited growth potential.
Best for: Offering cost-efficient placements and ensuring high fill rates.
Benefits of preferred deals
- Predictability: Publishers get a controlled, predictable revenue stream. Advertisers get a first look at premium inventory without price fluctuations.
- Relevancy: Publishers can select hyper-relevant brands and advertisers to help deliver a better UX. Advertisers can opt in to precisely-targeted placements.
- Profitability: Publishers can sell their premium inventory at a more competitive rate.
- Automation: Preferred deals are executed programmatically, making this an automated, cost-effective option.
Best for: Gaining predictability and opportunities for brand alignment, without the obligation to buy or sell.
Benefits of private marketplace
- Exclusivity: Publishers select which partners are invited into the exchange, giving them full control over who has access to their premium inventory.
- Transparency: Both advertisers and publishers gain clear insight into what kind of inventory is filled and purchased. They can also see the eCPMs and what creative runs.
- Quality: Advertisers can access top-tier placements. They also gain opportunities for brand alignment and contextual placements. This also results in a better experience for users.
- Profitability: With more premium placements and control over floor prices, publishers can see higher eCPMs.
- Automation: Automated programmatic media controls can eliminate the need for a separate sales team. This helps advertisers optimize resources and save time.
Best for: Delivering a positive UX by offering premium, brand-aligned inventory to hyper-relevant advertisers.
Benefits of programmatic guaranteed
- Reliability: Inventory volume is guaranteed, so advertisers can ensure impressions. Since spend is ensured, publishers have more control over their anticipated revenue.
- Quality: Advertisers gain access to top-tier, premium inventory. Publishers can use insights to negotiate better prices based on traffic quality.
- Transparency: Advertisers can see exactly where their ad will be served, while publishers gain higher control over what content is displayed on their app or site, ensuring on-brand creative.
- Automation: Guaranteed deals bypass the manual IO process, eliminating human errors. This also increases media planning efficiency for advertisers.
Best for: Replacing manual IOs with the convenience of a programmatic buy.
Understanding programmatic deals: An analogy
Reagan is an avid Red Sox fan. She goes to the MLB website to buy season tickets. She sees exactly what seats she wants and how much they cost. Plus, she can add them to her cart and buy them without ever having to deal with a middleman. The seats she buys are the ones she’ll have all season.
This is like a programmatic guaranteed deal.
The deal is 1:1 between Reagan and the MLB.
When Reagan confirms her purchase, then the tickets are reserved for her for the full season.
The MLB gets to set a fixed price.
Lamont is also a huge baseball fan. He and Reagan agree that if there’s ever a game she can’t make, she’ll give him a chance to buy the ticket off of her. Whenever she can’t make it to a game, she’ll call up Lamont and offer him the ticket. He isn’t obligated to buy it, but he has “first dibs” on the seat.
That’s like a preferred deal.
The deal is 1:1 between Reagan and Lamont.
Reagan is not obligated to sell Lamont the ticket. And if she does offer him a ticket, he is not obligated to buy it.
Reagan sets a fixed price.
When Lamont decides not to buy the ticket, Reagan moves onto another selling option. She posts the ticket in a private, baseball-lovers slack channel at work. The eight people in the group each offer different amounts for the ticket, and Reagan sells it to the highest bidder.
That’s like a private exchange — an invite-only opportunity for relevant audiences to bid on non-guaranteed inventory.
The deal is between Reagan and an exclusive group of buyers.
Reagan is not obligated to sell the ticket to anyone in this group.
Reagan sets a minimum price, but if it’s a good game, and the buyers are motivated, the bidding will drive up the price.
Reagan’s final option for selling the ticket is to go to StubHub. There, she can make them available to the public for purchase. In this scenario, Reagan will almost certainly be able to offload the ticket, since so many people will have a chance to bid. However, she’s not the only one offering tickets to games, and she may not get face value.
This is like an open auction. There’s both more supply and more demand, and the highest bid will win.
Reagan is selling on a marketplace where there are many Red Sox tickets being sold to all possible buyers.
Reagan is not obligated to sell the ticket to anyone in particular.
Supply and demand will set the price, and the highest bid on Reagan’s ticket will win.
Programmatic deals cheat sheet
Before you go, here’s a cheat sheet for remembering the four main types of programmatic deals.
