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Supply Side Platforms Becoming More Demand Focused

Supply Side Platforms Becoming More Demand Focused

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Supply Side Platforms (SSPs) are one of publishers’ most powerful ad tech tools. SSPs allow publishers to maximize the prices their impressions sell at, typically by automating the bidding process in conjunction with a DSP. 

But, at the end of the day, advertising is typically driven by demand, not supply. It’s why print publishers are moving digital, it’s why online publishers had to get creative after display ad prices dropped, and now it’s why even SSPs are courting advertisers. 

“Brands are the belles of the ball,” writes Seb Joseph at Digiday. “Ever since header bidding made a single impression available through multiple exchanges, SSPs are no longer exclusively in the business of trying to wring the most money from every impression for publishers. Now, they’re trying to run a two-sided marketplace where the most successful SSPs are the ones buyers trust enough to spend more of their money with them over their rivals.”

Learn More: What’s the Deal With Header Bidding? 

In other words, SSPs are no longer ‘just another’ programmatic player: they offer bid transparency that brands are typically unable to glean through DSPs alone. 

This brings us to an op ed from Chip Schenck, SVP of data and programmatic solutions at Meredith Corp (the publisher that sold the IP to Sports Illustrated this year and acquired Time last year). 

“In the ad tech supply chain, supply-side platforms (SSPs) have traditionally served as a proxy for the publisher, helping manage ad network yield and real-time bidding as a true partner to publishers,” writes Schenck. “However, amid recent market changes such as consolidation, commoditization and pressure to grow, SSPs have started looking more like something else entirely: exchanges that are driven by buy-side requirements. They have been leaning into demand-side needs at the risk of abandoning their core publisher clients in the process.”

SSPs typically focus on giving publishers the tools they need to manage their inventory and demand with price flooring, buyer roles and inventory packaging. Now, according to Schenck, many SSPs have created new tools focused on buyers, giving DSPs the ability to buy inventory on SSPs more easily in the name of more efficient real-time bidding pipelines. 

But that change had an unintended consequence: “As the demand side provided feedback, the buyer tools, such as enhanced bid reports, have become progressively more like the very tools that publishers had, reducing the publisher’s advantage.”

Here’s how it works now: “DSPs bid into an SSP’s auction, leveraging an algorithm specifically designed for second-price auctions; then, often with the help of SSPs, bids are reduced to a much smaller but still likely to win price. While this has been positioned as a positive for publishers to help them maintain revenue, the real result has been downward pricing pressure for everyone.”

In effect, SSPs are often providing more value to buyers and less value to publishers. Now, DSPs have the option to integrate with publishers themselves and publishers could reorient their inventory outside the context of an SSP. That kind of solution would be a big change to the current ad tech ecosystem.