The programmatic landscape is continuously evolving, creating waves in the ad-tech market for companies with Supply-Side-Platform (SSP) offerings. Over the last year, we’ve seen two trends playing out which will impact the seller exchange. First, standalone SSP companies are being acquired and absorbed into the holistic stack offerings of larger ad-tech companies. And second, the industry is shifting focus away from the publisher or the ad itself and moving towards penetrative advertising for the individual user. This means targeting the user across multiple channels at the right place and time—placing greater value on high-quality mobile and video SSP inventory. With the smaller SSP’s being swallowed up, competition in the SSP market will weed out the weak and force ad-tech companies to strive for greater innovation within the industry.
Sayonara pure-play publishing platforms
In the past few months two high profile shutdowns highlighted for the industry that SSPs are finding it increasingly difficult to stand alone as independent businesses. Some are being acquired by larger, holistic ad-tech companies and others are getting down-sized as companies look to ‘trim the fat’. The answer to why this is happening is three-fold. Foremost, private funding for ad-tech is becoming more selective, forcing consolidation of the industry. Secondly, marketers are tired of working with so many third-party platforms and are putting preference on companies that can offer a wide range of quality solutions. Lastly, although much overhyped, larger publishers are becoming more technologically savvy and have begun integrating programmatic technology directly into their site, such as with header bidding. This enables the publisher to sell inventory in real-time directly through demand-side platforms (DSPs), reducing the need for some SSPs. In sum, many SSPs are facing new challenges that are making it increasingly difficult to both stand out and stand on their own.
With increasing desire for holistic stack offerings and the market valuation for standalone SSPs becoming more affordable, we’ve already witnessed a flurry of acquisitions for publisher platforms from display to mobile to video over the course of this year. However, the SSP market still remains highly saturated and even acquired companies need to streamline in order to remain profitable as the industry landscape continues to evolve.
Hello individual users
SSPs have a lot more to offer than solely connecting publisher supply to marketer demand. The traditional advertising industry was turned on its head by the advent of ad-tech and continues to mold and adapt to an ever-changing market, as consumer behavior shifts from the big screen to multiple small screens and new technologies create more opportunities for audience engagement. That is why marketers are placing more emphasis on a highly penetrative media campaign, and are less concerned with the publisher or the actual ad. The average consumer sees hundreds of ads every day across TV, social media, websites and in-app, meaning the viewer’s attention is spread thin and ads are not always absorbed, i.e. wasted marketing budgets.
To combat this problem, more and more advertisers are applying a cross-channel approach which requires SSP data and reach and results in a highly targeted campaign. The cross-channel strategy ensures that only the most relevant consumers are being targeted and that each one sees the right ad on the right channel, at a time when they are most likely to engage. The bottom line is that SSPs enable publishers to package their inventory, audience and user segments based on quality KPIs such as high viewability and more. Therefore, they are a necessary tool for marketers to execute cross-channel targeting at scale and are the gateway to a penetrative marketing campaign with high ROI.
The future of SSPs – smarter, sleeker, superior
The reality is that although publishers might be able to integrate aspects of programmatic technology, they cannot implement all the advantages of a full-service SSP in-house and maintain their margins. Furthermore, there are limitations to programmatic integrations on publisher ad servers that make the SSP difficult to replace. The technology is just not there yet. There is no denying that the industry is consolidating and marketers are becoming increasingly selective about the platforms they work with.
The dynamic and competitive market will ultimately push SSPs to innovate and operate in new ways—and SSPs are likely to innovate faster than publishers can integrate equally matched service offerings. Predictive analytics, for example, is one way in which SSPs will innovate and show further utility. SSPs have access to vast amounts of publisher audience data as well as data on buyer preferences and past transactions. Machine learning algorithms will soon be able to identify behavioral patterns and anticipate optimal matches between supply and demand, removing the burden from media buyers. Make no mistake, SSP’s are here to stay and the next generation will provide even greater value for publishers and marketers alike.
Matomy EVP of media, Gil Klein