The Forrester Wave report on Sell-Side Platforms sets the stage for the publisher ecosystem in 2012 by labeling SSPs a “vital part of the publisher tech stack.” The SSP is an increasingly necessary tool for managing and optimizing a plethora of indirect sales channels – oh, and making sure they’re not cannibalizing direct sales. Not a pleasant balancing act, but one that seems to be impossible to pull off without a platform in these days of proliferating media-buying sources.
While Admeld and AppNexus made headlines with highest marks, Forrester’s report suggests a fragmented market in which all the players are generally proficient according to a base level of service. Not surprisingly, most of those surveyed were pleased with the results (with some trifling); Admeld is even giving out downloads of the report for the cost of some personal data.
“It’s great that Forrester dedicated a team and resources to analyzing the players in the sell-side platform category; it recognizes and signifies the importance of the category,” said Frank Addante, CEO and founder of the Rubicon Project. “As this report demonstrates, the market is fragmented with vendors offering a variety of products and services intending to help publishers best meet their business needs. So it’s nice to see some in-depth analysis being reported to help publishers navigate through the noise.”
Judged according to 34 criteria under the categories of Current Offering (e.g., auction model and platform, yield controls), Market Presence (revenue, publisher clients, financial backing) and Strategy, all of the companies were ranked close together, strengths and weaknesses generally balancing them out. However, Yahoo!’s Right Media nearly fell of the cliff into the “Risky Bets” category due to its low marks in current offering (2.45 out of 5) and a lackluster strategy rank.
So if the competition’s so close, what are the differentiators? Besides acceptable ad formats and customer support, Forrester noted that some SSPs (notably Rubicon and PubMatic) are branching into add-on data and ad management tools. But it was the potential for customized yield optimization capabilities that seemed to get the most attention.
Classic vs. New
The companies were segregated into two groups based on their legacy tech: the “classic SSPs” (Rubicon Project, PubMatic, and Admeld) all started as publisher tools for managing ad network and subsequently adjusted their platforms for the programmatic buying space. The report notes these have proprietary optimization algorithms. The “new SSPs” (Google’s DoubleClick Ad Exchange [ADX], Right Media and AppNexus) on the other hand, are the pub-facing interfaces of exchanges, generally allowing publishers more flexibility in terms of rule-making and buying sources.
“In our view, it appeared that the ‘new’ SSPs are exchanges that have added tools for sell-side partners to make their platforms more competitive,” suggested Kirk McDonald, President of PubMatic. “At PubMatic, we’ve been clear in our mission from the beginning and we remain focused on creating ad management and monetization tools designed specifically with publishers in mind.”
“We believe the ‘classic’ vs. ‘new’ SSP does not have a clear distinction because all the vendors provide programmatic buying,” added Addante. “Programmatic buying means there are business rules for how inventory is allocated to bidders and what price bidders are willing to pay on what inventory. This is not a new for some of the ‘classic’ SSPs.”
One from the classic and one from the new floated to the top of Forrester’s findings. With the “classics,” Admeld received high marks not only for its comprehensive offering, but also its experimentations with “private exchange capabilities, variable price floor controls, and advertiser-level bid reporting.”
Though its current offering didn’t rank as high as AdMeld’s, PubMatic excelled in strategy and reporting, getting good marks for its yield optimization and data management services. Rubicon matched PubMatic in terms of current offering (Forrester noted that both companies recently improved publisher controls and reporting) but fell behind on the strategy marker. Forrester did single out the company for its intuitive interface, as well as its integrations with agency buying tool Donovan Data Systems and the buy-side-focused REVV media buying platform.
On the “new” side, AppNexus made up for a market presence much lower than its peers and a poor user interface with the flexibility of its product offering. While all of the classic SSPs have services with various customized publisher controls (including private exchanges), AppNexus pretty much offers a build-your-own SSP on top of its infrastructure and integrations with the buy side (AppNexus was the only independent company evaluated as both a DSP and an SSP).
But AppNexus is a very different beast, President Michael Rubenstein notes. “It’s important to note that what differentiates us in this landscape is that we’re not a pure-play SSP, or a DSP for that matter, although we offer critical functionalities of each,” he said. “What we truly are is a technology company, here to help both sides of the aisle solve their most complex technology challenges.”
However, Forrester notes that “[m]aking the most of AppNexus capabilities, however, requires strong strategic, technical, and operational skills from the publisher as well as investment in marketing the publisher’s solution to media buyers… As such, AppNexus is ideally suited for large publishers that need to manage complex monetization challenges across multiple sites or properties and are willing to dedicate resources to building on top of the flexible and robust AppNexus platform.”
“[Pubmatic] did not receive the highest rating in the narrative analysis,” noted McDonald – AppNexus beat it out in terms in the strategy category. “At the same time, some of the other platforms were evaluated on not just the current capabilities, but also what they may do in the future.”
Google chose not to participate in the Forrester Wave and any analysis lurks under the shadow of Google’s acquisition of Admeld, a consolidation that’s likely to alter the space dramatically. The report noted ADX’s capabilities in supporting a variety of ad formats, its continuing evolution and its steady fill rates from the Google ad network as well as its deep integrations with the DoubleClick ad suite. However, its interconnectedness with other Google products and features is not completely a strength.
“Google is a publisher that is competing to capture the same ad spend as their publisher customers – especially comScore 500 publishers – are after,” Addante commented. “Publishers need a transparent, non-competitive, independent partner that is committed to providing a technology platform that delivers fair value to both their advertisers and their own bottom line.”
McDonald also stressed PubMatic’s independence as a strength, noting that Google has several competing advertising businesses as a platform provider, market maker and publisher.
“Many publishers continue to tell us that an independent, strategic partner is of critical importance to their business,” he said. “These partners want an independent SSP who they can trust to have no inherent conflicts created by being in the same display business as their customers.“
Finally, although it offers a high degree of publisher controls, Right Media skated the edge of being ranked a “risky bet.” Concerns abound over a declining customer service, slow product updates and lack of overall corporate strategy.
For the Next Time…
Being the first Wave report on SSPs, there was bound to be disagreement on approach and metrics. Although the report is meant as a gateway analysis on the offerings of the six companies, some thought it was too narrow, not taking into account critical factors such as geographic territories.
Some of the weighting of metrics was also criticized. For example, Addante was surprised that ad quality carried less than 2.5% weight.
“Essentially the ability to keep unwanted poor quality ads off a publishers’ site is deemed irrelevant,” he said. “In contrast, Data Leakage was weighted to be three times as important as Ad Quality and Malware taken together. Our experience is that most publishers believe that Ad Quality is more important than 2.5%.”
In addition, he felt that depth of marketplace was analyzed at all. “The chief judge of any SSP exchange is the strength of liquidity on the exchange for sellers,” he said. “I don’t believe liquidity was correctly evaluated to effectively measure the depth of marketplace.”
For a future Wave report, he hoped the metrics would be more aligned to publisher desires, with additional focus given to scalability.
“In a future version of this report, we’re anticipating that Forrester will give more attention to an analysis of data management and brand control features, which are both essential concerns for today’s digital publishers,” McDonald added.
He also suggested cross-platform capabilities and the ability to manage non-standard inventory types will be important next time around, while citing a trend toward more holistic advertising inventory management for publishers.
In the next report, “[w]e’ll likely see an increased focus on demand integrations to allow private exchanges, first look deals, and more,” suggested Rubenstein. “And, of course, mobile will be become more important as a larger percentage of inventory moves to tablets and phones.”