How GDPR Is Moving Ad Budgets Toward Private Marketplaces

Data privacy concerns are driving ad buyers to work closer with their publisher partners.

In a May survey of 300 US marketers conducted by Advertiser Perceptions and Trusted Media Brands, 55% of respondents agreed that recent data protection issues make them more inclined to move ad dollars from open exchanges to programmatic guaranteed and private marketplace (PMP) deals. The survey underscores how laws like the EU’s General Data Protection Regulation (GDPR)—which went live in May and stipulates that user data can be used only if a company has explicit permission from the individual—have led many ad buyers to adjust the ways they buy ad inventory programmatically.

After the GDPR went live, business publisher the Financial Times shut down its open marketplace activity to minimize its risk of getting fined for not complying with the new data regulation. This led to increased advertiser interest around the publisher’s programmatic guaranteed products.

In July, Digiday reported that several other publishers experienced a surge in demand for programmatic guaranteed deals following the launch of the GDPR. This is because PMPs and programmatic guaranteed deals, unlike open exchanges, allow advertisers to work directly with publishers in a controlled setting that often involves agreeing to prices before bids comes in. This helps ad buyers and sellers alike avoid getting paired up with unscrupulous partners who leverage their data and audiences in shady ways.

The tradeoff of moving away from open exchanges is that it can be expensive to do so since higher-quality inventory costs more. In Q1 2018, mobile PMP eCPMs worldwide were 170% higher than open exchange eCPMs, according to PubMatic.

Looking to learn more about how programmatic advertising is changing? Check out our Supply Chain Transparency report that comes out August 7.