Pub Demand Partners Get a Haircut

I remember those sweet early days of header bidding when pubs would try to one-up each other with their total number of integrations. During header-focused breakout sessions at the Publisher Forum, I’d causally overhear boasts like:

“Twelve? That’s not bad, but dude, we got like 15 partners up in there.”

Even during the height of header madness, such comments sounded ridiculous. But it took some time for reality to catch up—according to new research from ad tracker and data aggregator Pathmatics, publishers’ average number of demand partners took a precipitous during the summer and fall of 2017.

Analyzing data from the largest 500 publishers it tracks, the company noticed that the average number of SSPs, exchanges, and ad networks publishers leverage dipped from a high of 7.8 in March 2017 to a nadir of 5.5 in December of that year. That itself seems strange considering the typically higher traffic seen in the fourth quarter. The average number of demand partners appears to have leveled out at 5.7 in June 2018, but that’s a remarkable 26% dive from June 2017.

Let’s be honest—there never really was that much quality demand to justify double-digit header integrations. If anything, publishers were trying to beat the buy side at their own game—sprinkling cash on each and every DSP in an attempt to hunt down super-cheap cookied inventory. Much of the demand out there was duplicate or triplicate as the buy side sprayed and prayed their way across just about every DSP that ever existed.

But no longer, as Pathmatics data echoes what’s been suggested by DSP consolidation—advertisers have been ditching DSPs faster than teens are ditching Facebook. If Pathmatic’s tracking of its 100 largest advertisers is to be trusted, the average number of DSPs employed has recovered from a low or 3.9 in January 2018 to 4.2 in April. That’s a 40% slide from the peak of 7.1 in April 2016.

Pathmatics’ data backs up what we heard from agency representatives at Programmania during Ops in June—they’re buying through a lot fewer platform and relying more on their trusted publisher partners’ recommendations (it’s called supply path optimization, bro!). As for publishers, most of the header conversations at Publisher Forums over the last year or so have broken down to evaluating demand partner performance in an attempt to cull.

Don’t think that we’ve stabilized, though—last week’s reminder that domain-spoofing remains resilient despite the implementation of Ads.txt shows that there’s still a lot junk passing through the programmatic pipes. Perhaps we’ve only seen a haircut of ad tech providers, and the actual herd-thinning is still to come.