Australia’s largest private marketplace for online advertising, from eBay, is now open for business, highlighting the rise of invitation-only auctions to buy and sell digital advertising.

With more than 7 million unique visitors a month, eBay is one of Australia’s most popular sites – surpassed only by properties owned by Facebook, Google and Yahoo.

“For the first time, we have got a proposition in the market that has both intelligent use of data and scale, which is a unique combination,” remarks Matt Crook, chief digital officer for media agency network Aegis Media ANZ.

“It’s potentially game-changing,” he adds.

As more online ad sales become automated, helping advertisers find better deals for digital campaigns, private marketplaces serve as a useful counterbalance for premium publishers, helping them manage yields by giving them more control in pricing and access to inventory.

The first private marketplaces in Australia started trading this year, including one run by publishing major News Corp.

Ongoing discussions

Plans to open more are in hand, as both publishers and advertisers explore how to automate more online ad transactions with the use of pre-programmed algorithms, known as programmatic buying, while retaining value for both parties.

“We’ve talked to five major portals, plus large verticals,” Crook says.

“Those are mutual ongoing discussions, about how clients want to access inventory and how publishers would like to present it to us.”

Alongside Japan, where private marketplaces are also starting to take shape, Australia tends to be one of the first to pick up new approaches to digital advertising in Asia-Pacific.

From a standing start earlier in the year, private marketplaces account for a thin slice of Australia’s programmatic market today.

That proportion should grow however as publishers, wary of commoditizing their audiences in more open exchanges, set up their own closed marketplaces to tap into growing demand for real-time buying (RTB).

Interest is particularly high from automotive, finance and travel and tourism verticals, where there is high advertiser demand to reach niche audiences.

“It’s growing quickly because the price floors and the yields are much higher than an open exchange buy,” says Kaylie Smith, Asia-Pacific MD of Rubicon Project, the company behind the private marketplace platform for eBay in Australia.

Brand ads next

Most transactions in private marketplaces today are direct response ads, which account for the bulk of RTB trades as brand advertisers are more concerned about ads appearing next to inappropriate content.

Sales environments in private marketplaces controlled by publishers are starting to attract brand ads too, but the growth trajectory for this new revenue stream is unclear.

“It’s too early to say what will happen with brand growth,” Smith says.

“That’s the next hurdle. Audience guarantees will be coming towards the end of this year. Advertisers are used to that.

“That will speed adoption, but it’s too early to say how fast.”