What Is a Preferred Bidder Agreement

When it comes to the world of advertising and marketing, there are many different terms and concepts that you may come across. One such concept is the preferred bidder agreement, which is used in programmatic advertising. In this article, we will explain what a preferred bidder agreement is and why it is important.

What is a Preferred Bidder Agreement?

A preferred bidder agreement is a contract between a publisher and a demand-side platform (DSP) or advertiser. The agreement allows the publisher to give priority to a specific advertiser or group of advertisers when it comes to programmatic ad inventory. Essentially, it guarantees that the advertiser will have first dibs on ad space before it is made available to other bidders.

Why is it Important?

For publishers, a preferred bidder agreement can be beneficial because it ensures a steady stream of revenue from a trusted source. It also helps to simplify the bidding process, as the publisher doesn`t have to sort through as many bids to find a suitable match.

For advertisers, a preferred bidder agreement can help them to secure ad space that may be in high demand. This can be especially important for advertisers with specific target demographics or who are looking to promote a new product or service. With a preferred bidder agreement in place, these advertisers can be confident that their ads will be seen by the right people at the right time.

How Does it Work?

A preferred bidder agreement is typically negotiated between the publisher and advertiser, with the help of a DSP. The agreement will outline the terms of the contract, including the amount of ad inventory that will be reserved for the preferred advertiser(s), the duration of the agreement, and any special pricing or payment terms.

Once the agreement is in place, the publisher will make the reserved ad inventory available to the preferred bidder(s) before it is offered to other bidders. If the preferred bidder(s) do not want to purchase the inventory, it will then be made available to other bidders in a second auction.

In conclusion, a preferred bidder agreement is a contract between a publisher and a demand-side platform or advertiser that gives the advertiser(s) priority access to programmatic ad inventory. This type of agreement can be beneficial for both publishers and advertisers, as it provides a reliable source of revenue and helps advertisers to secure ad space that may be in high demand. If you are considering programmatic advertising, it`s important to understand the concept of a preferred bidder agreement and how it works.

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