Everyone eats each others lunch in adtech, but not nearly as brazenly than they do now.
It seems like a month goes by without an ad tech vendor chasing down another customer base with a comparable service. This is not a new trend in ad tech.
Vendors have been disrupting traditional media agency roles for years by disintermediating one another. It’s been inferred and not stated explicitly by these companies. They could step on each others’ toes, but not too much.
Ari Paparo is the CEO of Marketecture, an industry veteran’s most recent venture that aims to help clients make sense of adtech’s shifting sands. He explained the history behind the “push-and pull” business model that distinguishes demand- and supply-side platforms.
” They have different interests, and the SSPs desire as much listening [i.e. participation in an ad auction] and bidding[i.e. participation in an ad auction] as they can.” he stated. “The DSPs don’t want any listening because they are concerned about losing money, but bidding is what they do .
They have different interests. The SSPs want to hear as much as possible and bid as often as they can. DSPs prefer to listen as little as possible.
Ari Paparo, CEO, Marketecture
For instance, The Trade Desk implemented a new approach to supply-path optimization last year called Global Plament ID ,, a trend that sources expect their peers to follow, not to forget its Open Path initiative.
This is contrary to the preference of media agencies to establish “beneficial relationships” with supply-side players that give them technical benefits or financial benefits when it comes time to getting their hands on the most desired ad space. Paparo pointed out that many ad-exchanges are beginning to formalize “volume buying discounts,” agreements that don’t always go well with DSPs.
Times change and conflicts intensify
But markets evolve. Companies either adapt or fail when markets change. And with a slew of new ad tech companies traded on the open market in the last 18 months, the CEOs of such companies are now eyeing new revenue streams as a result.
As there is too much at stake, more advertisers are shifting more of the activation their programmatic advertising towards the sell side. This is where the sustainable data can be found. It’s no surprise that this is the place where disintermediation takes place. Anybody with enough influence in programmatic advertising will try to gain more control over this market, even if it means that they are encroaching upon each other’s turf.
Happenings on the sell side; Differiated by nuances; Rakes existential questions about adtech vendors.
New entrants shift focus
Take Integral Ad Science as an example. Although it is an ad verification company, its most recent move makes it more like a large SSP.
Dubbed Total Visibility, IAS’ new tool sounds similar to what SSPs have been pushing to marketers in recent years. The tech allows marketers to find the best route to premium publishers, and then determine a fair price for their inventory.
Not that what IAS is doing is straight from the SSP playbook. It has enough distinctions. It is possible to compare the financial impact of blocking ads against premium inventory, and the cost of premium inventory. It is argued that the path to impression can be used in the same way a programmatic buyer considers time of day, week, website, ad sizes, audience, bidding and other optimization factors.
” We believe that advertisers need solutions that monitor and optimize both media quality as well as media costs to achieve optimal results,” stated an IAS spokesperson. “Total Visibility goes beyond traditional supply path optimization to identify the most effective channels for purchasing high-quality inventory at a cost-effective price. Total Visibility is more than traditional supply path optimization. It identifies the best channels to purchase high-quality inventory at a low cost .”
These nuances aside, it is clear that IAS is competing (a little) with SSPs. They are no strangers to disintermediation. They have been trying to reach out to publishers who traditionally pay DSPs to help them grow their publisher-focused businesses.
SSP managers felt they had to be the preferred pipes for inventory for marketers, as they weren’t the only pipe to publishers. DSPs did not feel threatened enough to return favor in any meaningful way. However, the issue of third-party addressability (or lack thereof) put an end to this. This makes advertising on large areas of the open internet more difficult. Ad tech vendors are forced to segregate the good parts.
It’s not about disintermediation being okay in the adtech industry, it’s all about what makes sense right now.
Rob Webster is chief strategy officer at Canton Marketing Solutions
“In past times, enough fat was available to go around multiple vendor types. But publisher buying doesn’t require a DSP or SSP, content verification and so on, as long-tail does,” stated Rob Webster chief strategy officer of media consultancy Canton Marketing Solutions. The DSPs, SSPs and publisher consortiums are all needed to control this premium publisher space which is half of CTV. It’s not about disintermediation being acceptable in the adtech industry, it’s about what makes sense .
Historical conflicts flare-up
The events of the past quarter show how temperatures are rising.
Take, PubMatic — traditionally in the business of helping publishers sell ads programmatically — reported that it made more than a quarter (27%) of its Q4 2021 revenue from helping advertisers buy better impressions.
On one side, The Trade Desk (the industry’s largest independent DSP) convinced more publishers via its Open Path initiative to license ad tech from it. And not long afterward, GroupM licensed ad tech from PubMatic and Index Exchange itself to exert more control over how impressions are bought and sold.
Don’t forget to keep up with the privacy-induced consolidation wave.
Even the language around disintermediation is changing. It is not always portrayed in the negative light that it was in the past. It raises many existential questions about the value of certain vendors in ad tech. Are they really necessary? Are they just a bunch of middlemen who are looking to make a profit? If you look beyond these issues, there are still existential implications for the industry’s structure that need to be considered — for the better or worse.
“We are focused on building the digital media supply chain of tomorrow, which connects buyers and sellers, publishers, retailers, consumers, data platforms, and everything in between in an efficient, transparent and data-rich manner that is fraud-free,” stated Rajeev Goel (CEO of PubMatic). This is a new way of thinking about the SSP that has been used in ad tech. This is how we organize our thinking and prioritize, focusing on how to create value for different stakeholders
In many ways, the shifting role of SSPs in programmatic is a microcosm of the broader disintermediation wave engulfing ad tech.
“SSPs are going to continue to evolve in order to remain relevant in the ecosystem, beyond just bringing incremental demands to publishers,” stated Dan Larden of TPA’s U.K. head. Simply because there will never be one buying platform that does all for advertisers, it is logical to use an SSP to standardize and innovate across your different buying points
— Ronan Shields, senior reporter, advertising technology, contributed to this report