Supply Side Platforms: Reshaping History with Curation

To understand the story of digital advertising, you have to follow the pendulum of power’s arc as it swings back and forth between supply-side platforms (SSPs) and demand-side platforms (DSPs).

When cookie-based solutions dominated and put the power on the side of buyers, it seemed DSPs were going to hold on to the top spot indefinitely. But today, supply-side platforms are on the rise, driven by reinvigorated value of supplier data and the efficiency of curated inventory.

Join us as we chart the history of SSPs, explore the recent flurry of acquisitions, and explain why the future is bright for the supply-side.

History of Supply-Side Platform Evolution

Supply-side platforms have come a long way since their inception in the mid-2000s, repeatedly reinventing themselves in response to market and technological changes in digital advertising.

Early development: SSPs came onto the scene to help publishers manage and sell their ad inventory with newfound efficiency. Initially, they worked hand-in-hand with ad servers, centralizing ad storage and delivery while providing essential tracking and reporting capabilities.

Real-time bidding (RTB) and automation: The introduction of RTB in 2009 changed the game forever, enabling advertisers to purchase ad inventory at the individual impression level. SSPs provided the backbone for RTB, helping publishers optimize revenue through cutting-edge automated pricing algorithms.

Private marketplaces and programmatic direct: RTB had significant downsides, however, commoditizing publisher inventory and shifting the balance of power to buyers. In response, SSPs introduced private marketplaces, giving publishers the power to provide select buyers with exclusive access to premium inventory using their first-party data. Programmatic direct emerged, streamlining the process and pushing advertising efficiency to new heights.

Breaking (Or Buying) The Barriers Between Supply and Demand

In recent years, SSPs have been responding to the demand for supply-path optimization — off the back of damning reports on programmatic transparency — by blurring the lines between supply and demand.

• Increased efficiency: SSPs like Magnite and PubMatic have developed solutions that bypass DPPs entirely, enabling direct CTV video ad purchases and boosting transparency and cost efficiency.
• Regulatory opportunities: With Big Tech under the regulatory microscope, SSPs are poised to capitalize on potential divestitures. Legal battles against giants like Google could open the door for SSPs to attract publishers looking for fresh alternatives.
• Data integration post-privacy legislation: As privacy regulations tighten worldwide, SSPs have become indispensable in managing data loss, offering direct access to contextual and click-through data, and helping marketers adapt to a landscape rife with signal loss.

This demand for consolidated supply and a streamlined number of technology partners has lit a fire of consolidation in the SSP market, with companies jockeying for position and scale in spaces left open by weakened incumbents.

• Equativ and Sharethrough: Equative acquired Sharethrough as the company aims to catapult itself into the top three SSPs through expanded reach and scale.
• Outbrain and Teads: Outbrain’s acquisition of Teads opens doors to the lucrative CTV space and diversifies the company’s offering from the “chumbox” category.
• Verve and Jun Group: Continuing the trend towards greater scale bought Jun Group as part of the company’s continued development of its omnichannel offering.

At a time of enthusiastic venture capital and sky-high interest rates, we can expect to see further mergers and acquisitions as companies that can’t cement their position in the supply chain are swallowed by bigger fish.

Curation: The Next Evolution of SSPs

So what’s next for the consolidated SSP market? And how can they differentiate their offering at a time when DSPs are also vying to blur the lines between supply and demand? Looking at the market today, it’s safe to say SSP’s secret sauce is programmatic curation.

Here’s why:

• Audience matching: SSPs are leveraging first-party data from publishers to build curated marketplaces and private marketplaces (PMPs) tailored to specific buyer needs and audience segments, ensuring pinpoint targeting and effective placements.
• Real-time data integration: Unlike DSP-level curation, SSPs offer real-time data matching and reporting, enhancing transparency and efficiency. This immediate feedback loop allows advertisers to fine-tune campaigns on the fly, optimising performance.
• Direct relationships with publishers: SSPs facilitate direct relationships between buyers and sellers, cutting out intermediaries. This direct connection enhances trust, reduces costs, and streamlines the advertising process.
• Enhanced data-driven targeting: By partnering with third-party data providers, SSPs create data marketplaces that improve match rates and campaign performance. These partnerships let buyers add additional audience data layers to their targeting, especially valuable for those that have been busy gathering first-party data of their own.
• Flexible use of alternative identifiers: SSPs support various alternative identifiers, providing advertisers with more flexibility in targeting. This is crucial as DSPs often restrict which IDs can be used, limiting advertisers’ options.

Curation by SSPs not only optimizes the supply chain but also slashes fraud risk, cuts costs, and ensures that publishers thrive. If SSPs effectively capitalize on this strategic edge at this pivotal time in digital advertising, they will secure their role in the supply chain for many years to come.

From their humble beginnings as ad network mediators to sophisticated programmatic powerhouses, SSPs have continuously adapted to the industry’s evolving demands. With the ability to offer curated solutions, SSPs are breaking down supply-demand barriers, enhancing targeting, and fostering direct relationships between advertisers and publishers.

Learn more about Curation and how Lotame can help here.