It’s a tough time to be an SSP.
The advert tech ecosystem incentivizes publishers to drive up their bid density by working with many various SSPs, making it tougher for SSPs to supply patrons unique entry to writer stock.
And, exterior of the key sell-side platforms, most SSPs are seen by publishers as interchangeable pipes to the buy-side, with little to tell apart them when it comes to choices or distinctive demand sources.
The push for unique demand has led Magnite and PubMatic to work extra intently with the purchase facet, with each firms launching direct gross sales options this yr. However as SSPs and DSPs more and more converge in the midst of the programmatic provide chain, different SSPs, akin to Index Trade, assume their greatest guess is to double down on servicing the promote facet solely.
In the meantime, content material curation, proprietary advert codecs and versatile pricing fashions are additionally rising as choices that may set SSPs aside.
AdExchanger spoke to SSPs to get an thought of how they’re differentiating themselves and requested publishers for his or her perspective on how SSPs can stand out from opponents.
A crowded market
The SSP market turned crowded and commoditized as a result of advert tech rewards publishers that work with many various SSPs.
Since most DSPs had been constructed earlier than the introduction of header bidding, they have a tendency to allocate extra spend to publishers that ship them massive volumes of bid requests, mentioned Jounce Media Founder Chris Kane. Meaning publishers are financially rewarded for having many SSPs run auctions for his or her stock and resell their impressions.
Publishers used to have an incentive to restrict the quantity of SSPs built-in into their stack as a result of having many various SSPs energetic on the web page may cause websites to load slowly. However as advert server expertise has developed, latency from processing bid requests has turn out to be much less of a priority, mentioned Samuel Youn, VP of programmatic at Chegg.
These elements and others have contributed to the scale of writer advertisements.txt information tripling between 2020 and 2022, in line with Jounce, with the typical writer working with about 25 SSPs.
SPO-driven competitors and consolidation
Till not too long ago, SSPs weren’t apprehensive about consolidation out there as a result of the channel wasn’t mature sufficient, Youn mentioned. As an alternative, firms figured if they may get their code energetic on sufficient writer pages and hit a 5% win fee, they may make cash.
However SSPs are falling beneath extra scrutiny due to a rising buy-side deal with supply-path optimization (SPO), which seeks to chop out pointless hops within the provide chain. SSPs are sometimes singled out as including prices and carbon emissions as they purchase and resell writer advert stock on the open market.
And DSPs, like The Commerce Desk and GroupM, are bypassing SSPs altogether as they forge direct integrations with publishers.
With all these points compounding, the SSP market is shifting towards consolidation.
Yahoo shut down its SSP earlier this yr, claiming it didn’t see a viable path towards constructing a profitable sell-side platform and selecting to deal with the purchase facet as an alternative. EMX declared chapter after months of missed funds to its purchasers, racking up $50 million in debt.
However these dynamics aren’t distinctive to the SSP house, mentioned Kyle Dozeman, PubMatic’s CRO for the Americas. Consolidation is solely the inevitable results of a channel maturing over time.
“Yahoo SSP or EMX closing, that’s not a lot totally different than Dataxu getting offered to Roku for change on the greenback or Amobee being offered,” Dozeman mentioned. “These are the identical headlines, simply with a distinct acronym – DSP as an alternative of SSP – behind them.”
The top-to-end resolution
Elevated consolidation amongst each SSPs and DSPs is inflicting the availability chain to mix within the center. Gamers which have historically served solely patrons or sellers are launching end-to-end options to take care of their aggressive edge.
In response to DSPs forging extra direct connections with publishers, SSPs are additionally crossing over, with Magnite’s ClearLine and PubMatic’s Activate providing direct shopping for platforms for CTV and video.
Fairly than a number of dominant buy-side and sell-side gamers rising, it appears the way forward for advert tech will extra intently resemble Google’s end-to-end walled backyard mannequin.
However not all SSPs are on board with the thought of reducing out DSPs and dealing intently with patrons. Index Trade president and CEO Andrew Casale wrote an open letter to DSPs promising to by no means disintermediate them from the availability chain or construct an end-to-end platform.
In that sense, Index is trying to distinguish itself by reaffirming its dedication to the standard SSP enterprise mannequin.
“We don’t assume [working with the buy side] is important to exhibit our price, to drive the market to extra effectivity or to consolidate this market to its finish state,” Casale instructed AdExchanger.
In actual fact, Casale mentioned the pattern of consolidation in the midst of {the marketplace} might result in the return of the dangerous previous days of advert networks whose makes an attempt to service each side solely ended up benefiting themselves. “Most [ad networks] had sizable conflicts of pursuits that had been largely benefiting their margins,” he mentioned.
However Index’s technique has its critics.
“Each advert tech firm needs to be a two-sided platform,” Jounce’s Kane mentioned. “The letter that Index put out looks like taking pictures your self within the foot. That’s clearly not the course of change within the business, and it severely restricted their choices to make the strikes they’re going to wish to make over the subsequent couple of years.”
Though OpenX hasn’t provided the kind of direct shopping for resolution Magnite and PubMatic have, OpenX’s SVP of product Mike Chowla agrees that SSPs should get critical about serving patrons in the event that they wish to enhance their providing for publishers.
“Should you’re not working with the purchase facet in some capability, you’re not going to know what technical instruments it is advisable construct in order that they will extra successfully purchase stock,” he mentioned.
Tech innovation and distinctive demand
Creating direct partnerships with manufacturers and companies is an apparent approach for SSPs to supply publishers extra direct entry to unique demand sources. However it isn’t the one approach.
Creating distinctive advert codecs can also be an efficient option to deliver publishers distinctive demand from advertisers trying to purchase these codecs, mentioned Emry Downinghall, SVP of programmatic income and technique at Unwind Media. He pointed to TripleLift’s specialization in native advert placements and Kargo’s proprietary cell advert codecs as choices which have set them aside.
Promote-side content material curation – the observe of making use of concentrating on information inside SSPs to package deal advert stock throughout publishers into non-public marketplaces (PMPs) particularly tailor-made to the advertiser’s wants – may also make a writer’s stock extra engaging to patrons and enhance demand, Downinghall mentioned.
And SSPs can broaden their market share by specializing in the place demand is highest, like CTV. For instance, Cadent determined to amass EMX’s SSP tech to enhance its end-to-end platform’s CTV capabilities and its sell-side curation tech.
One of these tech innovation is far more worthwhile for SSPs than pursuing SPO offers like direct partnerships with patrons, mentioned Drew Stein, CEO at Audigent.
“Whenever you don’t have expertise to distinguish your stock, the differentiator turns into value,” Stein mentioned. “And when you will have an ecosystem of opponents all pushing SPO offers, you’re going to have total downward stress on pricing.”
When SSPs get right into a race to the underside on pricing by solely pushing SPO, they find yourself commoditizing themselves, Stein added. “Those which might be balancing product innovation and value are those which might be profitable within the market proper now.”
However rethinking their very own pricing fashions is one other approach for SSPs to face out, Downinghall mentioned. He mentioned we would see extra SSPs contemplating software-as-a-service (SaaS) fashions and even 0% take charges for open market demand going ahead.
