Commentary

Advertisers Will Soon Feel Impact Of Generic Programmatic Platforms

  • by , Op-Ed Contributor, November 14, 2016

The platforms that blazed the trail in programmatic have now reached maturation, and the segment is entering a new phase of realization. Yet gaps continue to emerge, some of which are fundamental and require a change in the underlying framework of the mature platforms. New companies trying to fill these market gaps have a choice to either rebuild the core components of the industry, or rely on outside technology so that they can focus on solving industry challenges that are better aligned with their internal skillset.

This has led to the rise of generic core platforms: that is, pieces of technology that handle some of the core responsibilities of a programmatic platform and are often white-labeled as part of a full-stack solution.

With that rise comes a need to reflect on what these core components should be and whether or not the industry has built a strong enough standardized framework, so that some portions of the underlying technology may become commoditized. In other words, is it no longer crucial to develop certain components in order to achieve the original goals of a programmatic technology business? Advertisers, agencies, and some of the original demand-side platforms (DSPs) are about to find out.

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White-labeling and generics are nothing new in the online media space. After all, many of the platforms that advertisers rely on today are hosted on Amazon Web Services to save cost on server farms and bring solutions to market faster.

Generic companies like IPONWEB, Beeswax and BidSwitch are essentially offering components of the programmatic stack as a service. So, rather than build an entire programmatic stack from scratch, a company interested in building a stack can cobble together the parts they need and get up and running quickly.

There are two trends driving this rise. First and foremost is the desire of advertisers looking to bring their technology in-house and effectively “own” the programmatic stack. The other trend is trading desks and ad tech companies themselves looking to focus on a core competency and outsource some of the other development.

This is not without problems, however, especially for DSPs. These platforms differentiate themselves by factors such as audience, reach, unique inventory, creative capabilities and reporting. Consolidating these factors into a generic player renders the DSP obsolete. What is the unique selling proposition to the market if the technology is built on a generic platform that offers components similar to all DSPs in the market?

While some technology players may be worried, it’s less obvious if advertisers will notice or even care. Agencies and trading desks care most about the time and effort required to get a campaign up and running, including everything from onboarding data to optimization. By leveraging outside generic tools, the partners that agencies use can focus on the things most important to their clients, rather than the guts of programmatic that are being commoditized.

Decision-making today comes down to how easy it is for an agency to get a campaign running so that it can spend time and effort on the things that matter, like ROI. And if ROI is so important, then we have to ask about the metrics used to measure it. Generic platforms may provide cost savings, but those savings may not result in high-performing campaigns.

As the core platforms commoditize the programmatic stack, differentiation will be limited to unique data, and the targeting of audiences, workflow, reporting and design. There is also an opportunity to program the optimization and bidding technology without having to build and maintain your own. This will lead to advertisers taking more and more ownership of their custom-built stack, which should cause agency holding companies some concern.

Ultimately, advertisers and technology companies need to determine what pieces of the equation are strategic and will make a difference in their campaigns, and which pieces they’ll allow to become standardized, so that they may focus on the most important elements for success.
3 comments about "Advertisers Will Soon Feel Impact Of Generic Programmatic Platforms".
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  1. Ed Papazian from Media Dynamics, November 15, 2016 at 8:22 a.m.

    Digital media advertisers..that is.

  2. Kyle Cottrell from LiquidAdX , November 16, 2016 at 8:53 a.m.

    Great peace, yes 99.9% of the ad tech, mar tech, DSP's and in fact SSP's work over common core functionality.

  3. Kyle Cottrell from LiquidAdX , November 16, 2016 at 8:53 a.m.

    Great peace, yes 99.9% of the ad tech, mar tech, DSP's and in fact SSP's work over common core functionality.

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