Deal IDs Now Comprise 15% Of SpotXchange's Programmatic Revenues

Mike Shehan, CEO, SpotXchange 2013SpotXchange, a video-marketplace operator focused on the supply side, is the latest private marketplace provider to add Deal ID functions to its offerings.

Deal IDs, still mostly associated with general display, are an attempt to make exchange buying friendlier to publishers that want to set reserved inventory aside for specific buyers (or categories of marketers).

It's also a way for demand-side platforms and SSPs like SpotXchange to tap into publishers' more valuable guaranteed inventory. Over the summer, video SSP LiveRail unveiled its Deal ID product, and display SSP operators like PubMatic and Rubicon Project are expected to increase their focus on video.

There is a concern that Deal IDs result in more costs for publishers while limiting their scale, since frequently only a small set of marketers meet the criteria set down in these agreements. SpotXchange CEO Mike Shehan offered a response to that concern.

"Our Deal ID support offers brand advertiser-level transparency into spend and bid activity within the deal," he said. "If a trading desk negotiates a programmatic direct deal on our platform with a publisher, that publisher can see bidding activity of each brand behind the desk natively in our UI. And that insight is actionable.Our publishers can then block or create individual price rules by advertiser – not just buyer – as well."

Even though it's been offered "unofficially" to clients up to now, Shehan said 15% of SpotXchange's programmatic revenue comes from Deal IDs, though the company did not share actual dollar amounts. In contrast, more than half of SpotXchange's revenues come from RTB  – up from 5% just two years ago, Shehan noted this summer.

The increased presence of Deal IDs will likely make private exchanges more appealing to DSPs, said Maria Martinez-Diaz, senior manager of Business Development at DataXu, a company that has worked with  SpotXchange on these arrangements.

"When we started being approached to do deals within private exchanges about two years ago, it was very difficult because everyone had different rules and definitions," Martinez-Diaz said. "Deal IDs have streamlined and standardized the process. It provides a lot more flexibility when it comes to optimizing budgets for the brands we work with. It shows how companies like SpotXchange can learn from what's working in display and adopt it for video ad sales."

Earlier this month, during a panel on private exchanges at a PubMatic conference, Megan Pagliuca, VP and GM of digital media at Merkle, noted that Deal IDs have become much better from an operational efficiency standpoint.

"In the past, we tended to avoid private exchanges, because we would have had to set up a line item for every deal," Pagliuca said. "Now, we can have one line item for multiple deals. It's getting better, but it took awhile."

 

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