MediaMath Fallout; Privacy Sandbox Rollout; US & EU Data Privacy Framework Launch

People may not like it, but it's here to stay as an ad tech tax. Eliminating sequential advertising from the ecosystem will require publishers to band together to refuse to work with any SSP that offers it — an unlikely scenario. "No single publisher has enough scale to make an SSP take that out of their contract. The SSPs will keep sequential liability protection for themselves as long as possible. I highly doubt any significant volume of publishers will stop doing business with PubMatic, Magnite, TripleLift, Wunderkind, the SSPs that have clawed back," said Justin Wohl, Chief Revenue Officer at Salon.

Emry Downinghall, SVP of Programmatic Revenue and Strategy at Unwind Media, agrees. "I don't think publishers are in a position to drop an SSP with a meaningful 'share of wallet' due to a clawback. However, if the SSP is a marginal contributor to overall revenue, it would make sense for the publisher to re-examine their relationship if they felt uncomfortable with how SSP managed their risk."

Enforcement is Case-by-Case

Not every SSP plans to enforce its sequential liability clause. Google told AdExchanger that it will continue to pay its publishers, as did GumGum, Colossus SSP, and Index Exchange. “None of the companies who are choosing not to enforce sequential liability are going so far as to remove the clause from any publisher contract. They would much prefer the option to be benevolent when convenient and to protect themselves when necessary,” Messer said.

That may be so, but there are good business reasons for some SSPs to be benevolent. Take Colossus SSP, an SSP that has focused on building a strong roster of general market outlets as well as diverse, multicultural and niche publishers that have previously been left out of the programmatic ecosystem. “We're well aware that the latter group often has cash flow constraints, and being a responsible partner — to not disrupt payments — is vital in maintaining those strong ties to support a truly inclusive marketplace,” said Mark D. Walker, CEO of Direct Digital Holdings, which owns Colossus SSP.

And that’s kind of the point: Many SSPs have invested in building a roster of publishers in order to curate unique audiences their sales teams can sell to advertisers. Opting not to clawback money is a way for at least some SSPs to protect their investments.

Publishers Beware
Even if a publisher isn't asked to pay back money to PubMatic or Magnite, it's still a wake-up call for the industry. For people like Jana Meron, founder of Lioness Strategies, the downstream effects of MediaMath's bankruptcy should spur everyone in the industry to focus on its overall health. "Publishers need to be aware of what's happening in the market, within the digital ecosystem, to ensure its health and safety. We cannot turn a blind eye to understanding how revenue is generated, who the players are, what differentiates them, and which companies continue to support the ecosystem for the better."

In a LinkedIn post, Robert Janes, Head of Product at AdButler, suggested that publishers can protect themselves by moving away from programmatic and focusing on direct deals.

That’s one way to get rid of future clawbacks, but it might not be to everyone’s taste.

• Companies must now familiarize themselves with the specifics of the framework to ensure compliance with the new requirements.
• The framework's success will heavily rely on the effective functioning of the new Ombudsperson mechanism, which will act as an independent overseer to address data access complaints and concerns from E.U. individuals.
• The U.S. must commit to stricter privacy standards, aligning more closely with GDPR principles.