Key Takeaways:

• Preferred deals are one-to-one agreements between publishers and advertisers with fixed pricing

• They offer advertisers priority access to premium inventory before it hits auctions

• Unlike Programmatic Guaranteed, there's no commitment to buy or deliver specific volumes

• These deals typically sit between Private Marketplace and Programmatic Guaranteed in the waterfall

• They balance flexible terms with premium rates, making them ideal for mid-tier campaigns

What Are Preferred Deals (And Why Should You Care)?

If you've been around programmatic advertising for a bit, you've probably heard of Preferred Deals. But there's often confusion about where exactly they fit in the programatic ecosystem.

Let's cut through the noise: a Preferred Deal is essentially a direct, one-to-one deal between a publisher and an advertiser where the publisher gives the advertiser "first dibs" on specific inventory at a fixed price.

Think of it like having VIP access to a store before the general public – you don't have to buy anything, but you get first choice at an agreed-upon price.

How Preferred Deals Actually Work

In the programatic waterfall (the sequence in which ad impressions are offered to buyers), Preferred Deals sit at a high priority level. Here's the typical flow:

1. A publisher and advertiser negotiate and agree on a fixed CPM price

2. The advertiser gets priority access to the inventory before it hits other auctions

3. If the advertiser decides to buy the impression, they get it at the predetermined price

4. If they pass, the impression moves down to private marketplace (PMP) or open auction

The key difference from other deal types is that neither party has a volume commitment. The advertiser isn't obligated to buy any specific number of impressions, and the publisher isn't guaranteeing delivery of any specific amount.

Where Preferred Deals Fit in the Deal Type Spectrum

To understand Preferred Deals better, it helps to compare them to other programmatic deal types:

As you can see, Preferred Deals offer a nice balance between the flexibility of auction-based buys and the predictability of guaranteed deals.

When Preferred Deals Make Sense

Not every campaign or inventory type is right for Preferred Deals. They tend to work best in these scenarios:

For Publishers:

• When you want to monetize high-quality inventory at premium rates

• If you need predictable revenue streams without hard delivery guarantees

• When you have established relationships with advertisers who consistently buy similar audience segments

According to BidSwitch, publishers often use Preferred Deals to balance revenue optimization with sales team efficiency.

For Advertisers:

• When targeting specific audience segments on premium sites

• If you want price certainty without volume commitments

• When testing new partners before scaling to Programmatic Guaranteed

Double Verify notes that advertisers typically use Preferred Deals when focused on reaching specific audiences on trusted publisher sites.

Pros and Cons of Preferred Deals

Like any ad buying approach, Preferred Deals have their advantages and limitations.

Advantages:

• Premium Access: First look at quality inventory

• Price Stability: Fixed rates for easier budgeting

• Brand Safety: Known, trusted placements

• Relationship Building: Direct publisher connections

Limitations:

• No Volume Guarantees: Delivery isn't assured

• Higher CPMs: Premium access comes at a price

• Limited Scale: May not reach full campaign goals

• Setup Time: Requires direct negotiation

Implementation Tips

If you're considering Preferred Deals, here are a few practical tips:

For Publishers:

1. Identify your most valuable audience segments and package them appeallingly

2. Set realistic pricing that reflects the premium nature without scaring away buyers

3. Monitor fill rates closely - if buyers consistently pass, your price may be too high

For Advertisers:

1. Start with specific audience targets rather than broad reach goals

2. Test in smaller volumes before expanding commitments

3. Compare performance to other buying methods using the same KPIs

According to Google Ad Manager, the key to successful Preferred Deals is finding the right balance between price flexibility and inventory quality.

How Preferred Deals Compare to Other Deal Types

Still trying to figure out if Preferred Deals are right for you? Let's do a quick comparison with the alternatives:

Preferred Deals vs. Open Auction

• Both have no volume commitment

• Preferred Deals offer fixed pricing vs. auction dynamics

• Preferred Deals give priority access to premium inventory

Preferred Deals vs. Private Marketplace (PMP)

• Both target premium inventory

• PMPs still use auction mechanics (with floor prices)

• Preferred Deals have higher priority in the waterfall

Preferred Deals vs. Programmatic Guaranteed

• Both use fixed pricing

• Programmatic Guaranteed includes volume commitments

• Preferred Deals typically have lower CPMs

As Newor Media explains, the right choice depends on your specific campaign goals and inventory strategy.

The Bottom Line

Preferred Deals occupy a sweet spot in the programmatic landscape, offering more structure than open auctions but more flexibility than guaranteed deals. They work best when both parties value the relationship and understand that while nothing is guaranteed, there's mutual benefit in the arrangement.

For publishers with premium inventory and advertisers seeking quality placements, they're definitely worth exploring as part of a balanced programmatic strategy.

This article is part of our Monetization Minis series, designed to help publishers and adtech professionals understand key concepts in digital advertising monetization.