The borders marking SSP and DSP territory have never been rigid, let alone tightly enforced. There has always been crossover, whether that involved SSPs cozying up to agency trading platforms or DSPs cutting deals with SSPs or specific publishers.
But as the main feeder exchanges settles at three—GAM, Amazon’s Transparent Ad Marketplace (TAM), and Prebid—there’s a great deal more murkiness in the middle; even more cross-pollination as SSPs pine for advertiser spend and DSPs tighten their bonds with premium publishers.
The question of “how many intermediaries are actually necessary?” is ringing louder than ever, and to some extent SSPs and DSPs are trying to usurp each other’s positions as there may not be room for both parties.
The thing is, they should both squarely have their sights on pleasing publishers.
Brave New Cookieless World
We are fast exiting a programmatic world of chasing down third-party cookies. As privacy regulations like CCPA mount up, the browsers continue their merciless cookie crackdown, and users flock to cookieless environments like connected TV, publisher first-party data is going to be all the more valuable—namely intent and contextual data.
There isn’t really a third-party cookie replacement, but many privacy-friendly technologies that serve as a substitute: shared identifiers, identity solutions leveraging parallel paths (“sidecars”) to the exchanges, blockchain-based targeting, AI-powered behavioral targeting, contextual signals, etc.
The open programmatic ecosystem’s survival in the face of walled garden dominance requires buyers, sellers, and technology intermediaries to let a base line of identifying data flow between them. Those that can capitalize on nuances beyond the identity layer are the ones that will thrive.
Publishers will have the easiest time here as deciphering audience characteristics is central to both monetizing and delivering better user experience. It’s not their fault that advertisers have been too distracted by the abundance (and low price) of third-party cookies. But as those dry up, brands need publisher insights as targeting differentiators, and the right ad tech partners can help pubs highlight intent and contextual signals.
Google Tightens Its Grip on Pubs
Google seems to have seen the writing on the wall about publishers’ growing prominence. Its DSP DV360 is closing down its managed service offering and has ceded ground to The Trade Desk and Amazon’s DSP, according to an Advertising Perceptions survey. At the same time, Google has tightened its grip on publishers with its Open Bidding S2S connection and the Unified Auction.
The latter limits publishers’ flooring controls, injects a new rules regimen (unified pricing rules), and thereby complicates publisher attempts to manage demand outside of Google’s pipes. Is Open Bidding and the Unified Auction the long promised header-bidder killer? No—after the UA launch, some publishers reported better performance from their header wrappers.
But the point of these additional obstacles is to make publishers take a hard look at the opportunity cost of header revenue. Some will find the complexities of header setup—including additional skilled personnel and various point solutions for optimization—more valuable than others looking for a straightforward solution (ahem, Open Bidding and Unified Auction).
And the supply-side product executive shakeup of September 2019 suggests further consolidation of monetization services (think mobile), tightening the fist further. I also have a sneaking suspicion GAM will continue to limit pub access to data and portability options in the name of privacy.
Battle Royale: DSPs vs SSPs
It’s no secret DSPs can bypass SSPs if they have the right set up; for example, access to Google’s Open Bidding (at a price) or direct pub connections via the header. The Trade Desk gets this and has integrated into the PreBid.org continuum.When making further programmatic inroads with the buy side, PubForum Scottsdale attendees told me they were always speaking with DSP reps, not agency people.
SSPs who have been concentrating on their buy-side portfolios need to re-focus on the supply side. As Meredith’s Chip Schenk notes in a recent AdExchanger column, SSPs risk alienating prized pubs if they cozy up too far to the buy side. I can’t think of a worse time to sully your publisher relationships—DSPs are actively courting premium publishers, brands are waking up to the value of publisher data, and Google is doing its damnedest to make outside demand options inconvenient.
But… how do SSPs shine in a world where their very existence is increasingly pondered? High-value publisher solutions seems to be the best differentiator. Rubicon Project and PubMatic have built clever technology on top of PreBid that will potentially save pubs labor—and cash that would have gone to point solutions. OpenX has an identity product that gets around the dwindling relevance of cookies.
This should be a prime place for innovation—I think flexible placements could be huge. Imagine a page where the number of ad slots and formats available is determined in real time by both user preference and best revenue options. It’s not that far off.
Next year is bound to bring further consolidation among DSPs and SSPs, but it’s unlikely we’ll find out whether there’s enough room for both parties to exist. Ultimately, publishers will provide the answer to that question.