Preferred Deals – What Is It and How to Set It Up Optimally?

Earlier, we mentioned in our post on programmatic direct that more and more publishers, as well as advertisers, are moving towards programmatic direct and PMP deals because of the many benefits these private setups provide. Moving forward, let’s take our discussion further by understanding preferred deals to make sure that you are aware of all the ways to monetize your ad inventory.

Table of Contents

• What is a Preferred Deal?
• Why Preferred Deal?
• How Does the Preferred Deal Take Place?
• How to set up a Preferred Deal in Google Ad Manager?
• Challenges with Preferred deals
• What’s Next?

What is a Preferred Deal?

A Preferred Deal is an agreement between a publisher and a buyer to provide preferential access to the publisher’s inventory before it is auctioned in the open market. The preferential access is provided in exchange for a fixed CPM.

Please keep in mind that the access is ‘preferential’ which means that you will give the first opportunity of buying your inventory to a specific advertiser but it is not guaranteed that the buyer will always be ready to buy it. This is why a preferred deal is also called programmatic non-guaranteed. 

Why Preferred Deal?

You as a Publisher enjoy many benefits with preferred deals that can be missed out while selling your inventory in private or open marketplace auctions. 

• Fixed CPM: In preferred deals, you get the promise of a fixed CPM from the buyer in exchange for providing the first look advantage.
• Premium Prices: Since you provide your premium inventory to the premium buyers, therefore you also get the premium price for it.
• Price Control: The unpredictability of prices is way less in preferred deals when compared to the open market auction. Due to this, you have more control over the price of your inventory with preferred deals.
• Flexibility: With Preferred Deal, you are not completely dependent on just one buyer. If the buyer isn’t purchasing your inventory, then you have the option to sell it in the open market.
• Quality Control: You get the chance to audit and verify the campaign before running it on your website, it helps you to ensure good quality of ads on your website.
• Transparency: Being in direct contact with the buyer increases transparency in the process.

Preferred deals also have many advantages for advertisers as well, including:

• Security: Preferred deals are less prone to ad frauds because there are just two parties involved in the process i.e., the publisher and the advertiser. In the open market, there are many more players involved. So, the advertiser’s investment is more secure in preferred deals.
• Brand Safety: The placement of ads is a major part of the deal. Both the publisher and the advertiser agree to display the ads in specific placements. Therefore the advertisers can make sure that all the ads are being delivered in a brand-safe environment. The open market cannot provide such assurance.
• Flexibility: Preferred deals allow the advertiser to be flexible with the buying. If an impression is not compelling enough then the advertiser has the option to pass off the opportunity.

How Does the Preferred Deal Take Place?

Mostly publishers with high inventory volume and quality audiences are able to pull off preferred deals. Here is a generic overview of how the process takes place. 

• First, the advertiser finds the ideal website to market the brand by looking into its audience, traffic and other relevant factors for the marketing campaign.
• The publisher is then contacted by the advertiser and the campaign requirements are discussed. 
• If a deal is agreed upon then all the technical arrangements like ad configuration, pixel tracking, etc. are made.
• The advertiser places the order.
• The publisher checks and verifies the campaign.
• Finally, the order is executed by running the campaign.

How to set up a Preferred Deal in Google Ad Manager?

You can enter and manage preferred deals with the help of Google Ad Manager. Follow these steps to set up preferred deals in GAM. 

• Link your primary Google Ad Exchange account to Ad Manager.
• Go to Admin > Global Settings > Features. Find the Programmatic Direct button and toggle it on. Save the settings. This will enable Programmatic Direct for you.
• Go to Sales > Deals Settings and create your Publisher Profile so that buyers can see you in the marketplace. In the publisher profile, you can describe your inventory and mention why a buyer should partner with you. 
  
• Go to Admin > Global Settings and configure your inventory types. This will help your sales representatives to specify the type of inventory during the negotiation process.
• Now your sales team can start sending and negotiating proposals with buyers. They can also receive the request for a proposal from the buyers.

Creating proposals:

• Create a proposal by going to Sales > Proposals > New Proposal.
• Fill in all the details and click on Save Draft.
• Click on the New Line Item to start creating the proposal line items.
• Select the proposal for which you want to create the line item and then click on New Line Item
• Fill in all the details, do not forget to select Preferred Deal while selecting the type of line item.
• Click on Save Draft.

Your preferred deal is now set. Once you and the buyer agree to the proposal (after a few negotiations), the campaign can be executed.

Challenges with Preferred deals

There is no doubt that preferred deals can increase your average revenue and help you in getting the right price for your premium inventory, but there are some challenges as well which you should address before getting into implementation. 

• Unfilled Impressions: The buyer has the option to not buy your inventory. If the buyer rejects the offer then the impression moves to private auction even if it still remains unsold then it moves to the open market. During all these transfers, the possibility of the impression to remain unfilled still looms above the publisher.
• Entry Barrier: The publisher has to be big enough to catch the attention of big advertisers for preferred deals. This factor limits the entry of small publishers.
• Risk of Undervaluation: The competition in the open market can take the prices of your inventory higher. While dealing with the advertiser privately, you need to be aware of the right value of your inventory otherwise you have the risk of undervaluing your inventory. If you sold the inventory at the wrong price then there is no competition in preferred deals to push that price higher.

What’s Next?

Preferred deals have the potential to increase your revenue and therefore you should not shy away in trying it. Make sure you have a sufficient amount of right audience to leverage the benefits to the fullest. If you need any help with your set up of preferred deals then feel free to contact us. In case of any doubts, ask right away. 

Frequently Asked Questions

What’s the Difference Between Programmatic Guaranteed & Preferred Deals?

In guaranteed deals, a publisher will guarantee to deliver a certain volume of impressions, buyers, on the other hand, pre-agree to pay a specific price for the guaranteed impressions. While preferred Deal is an agreement between a publisher and a buyer to provide preferential access to the publisher’s inventory before it is auctioned in the open market. The preferential access is provided in exchange for a fixed CPM.

What are the Benefits of Preferred Deals for Publishers?

There are certain benefits that publishers can utilize from Preferred deals including,

• Fixed CPM
• Premium Prices
• Quality Control 
• Transparency

Can I Sell 100% Inventory with Preferred Deals?

No, you can’t sell 100% of your inventory with Preferred Deals. 

Even if you have inked preferential deals with several buyers — covering your ad inventories completely, it’s unlikely that buyers will bid for 100% of your impressions when the time comes. 

Because in guaranteed deals, buyers guaranteed you to buy the impressions at a certain price whereas, in the preferential deals, no such ‘guarantee’ has been made.