On average, the 500 largest publishers in the U.S. use about six such vendors, down from about eight a year ago, according to aggregate data from ad tracking firm Pathmatics, which provided the data at Digiday’s request. This reduction in vendors suggests that publishers are coming down from their header-bidding sugar highs and getting stricter about what ad tech vendors they work with. This shift puts further pressure on ad tech consolidation, as publishers purge ad tags from their pages to increase page speed, make the ad-supply chain more manageable and reduce their exposure to arbitrage.
With the culling of supply-side platforms happening across the industry, there are many anecdotal examples of publishers getting more diligent about whom they allow to represent their inventory. Vox Media told Digiday it used to sell inventory through 12 vendors, but now it uses eight. Observer Media (parent of the New York City-centric Observer, formerly the New York Observer) said it cut its SSPs in half from about 20 to 10. LittleThings said it went from seven to five SSPs, and The Daily Beast went from five to four SSPs. Turner told Digiday it used to have 30 supply-side vendors, but now it uses six.
The purging of SSPs is a recent phenomenon that has only taken off over the past year. In an analysis of 3,000 publisher sites for Digiday, MediaRadar found that in 2016, 45 percent of publishers increased their number of SSPs per quarter, while just 19 percent reduced their SSPs per quarter, on average. About a third of the sites made no change to their SSPs each quarter.
But in 2017, just 23 percent of publishers increased their number of SSPs per quarter and 31 percent decreased their SSPs, according to MediaRadar. The remaining 46 percent made no change.
Scott Bender, head of publisher strategy at Prohaska Consulting, said publishers’ old approach was to perpetually onboard new SSPs to make the auctions for their inventory more competitive and drive up prices. In the early days of header bidding, publishers boosted their CPMs by as much as 50 percent just by making a lot of SSPs simultaneously compete against each other in programmatic auctions. But many publishers are now finding that the diminishing returns from each incremental vendor aren’t worth the hassle.
“Many of them are undifferentiated duplicate technology that don’t add incremental value,” said Jeremy Hlavacek, vp of programmatic at The Weather Channel. “It’s more work to manage all of them, and it’s more third-party tech on our pages.”
David Pond, director of programmatic operations at Vox Media, said Vox Media cut SSPs to reduce its exposure to data leakage and the ad fraud associated with SSPs reselling inventory. The culling underway across the industry is likely just getting started.
“I expect more publishers will recognize that more SSPs isn’t always better,” he said.