The Other Type Of 'Scale' Favors Buyers

The type of “scale” most often referred to in the digital ad industry revolves around size. But what about “scale” in terms of comparison?

“The overall ecosystem is teetering dangerously [in favor] on the side of the buyer,” said Jason Fairchild, co-founder of OpenX. Fairchild was speaking on the “Revenge of the SSP” panel at the RTB Insider Summit on Friday.

“The industry won’t grow as fast as it can unless we get to a level playing field,” Fairchild asserted. He believes publishers need full visibility into the fair market value of every impression -- which is more or less exactly what OpenX is trying to do with its new SSP features.

The playing field is imbalanced, Fairchild argued, in part because of the structure of exchange-based trading. Data management platforms (DMP) or demand-side platforms (DSPs) that represent hundreds or even thousands of bids for a single impression will only send one of those bids to an exchange, which Fairchild maintains creates "artificial liquidity" and drives yield down.

The other issue publishers face is different selling methods competing against one another. Fairchild shared an anecdote about a publisher that had the chance to sell an impression for $1,300 via RTB, but was never able to because the direct sale price point was set at $10, and direct sale trumped RTB. (We don’t know how much the impression ended up being sold for, but it wasn’t $1,300.)

However, Kaylie Smith, head of seller cloud at Rubicon Project, doesn’t think the problem is as “dire” as Fairchild painted it to be.

“We are getting to the point where we can understand the liquidity [of the market],” Smith retorted, to which Fairchild responded: “Reasonable minds can disagree.”

"Scale" image from Shutterstock.

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