Commentary

The SSP Evolution

The supply-side platform (SSP) model has been with us for more than a decade. SSPs continue to help publishers sell their inventory more efficiently, as well as manage their relationships with multiple networks and ad buyers.

But now it’s time to reassess the role of the SSP.

Originally, SSPs served as a yield optimization tool for display advertising. Once you have finished your direct sales, you can offer advertising inventory to multiple exchanges and networks.

The problem is that this feature became commoditized.

Yes, every SSP will brag about their programmatic yield optimization deep-learning machine algorithm that was developed by rocket scientists (that’s a real pitch that I once actually received.)

But the truth of the matter is, if you run, say, five tier-A SSPs, each one of them will present almost identical results.

So the question becomes, “What should be the SSP’s new challenge?”  I’ll offer up three main points for how SSPs will evolve.

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Focusing on the Multiproduct

While we still have display advertising — around since the ‘90s — we now have other players in the space like video, native, affiliate, and other variations of advertising. Surprisingly, no SSP took the position of actually managing these ad variations This is almost the evident path — but as it has no technological barrier, soon it will be commoditized too.

Focusing on User-Experience Management

According to an Accustream survey for Verizon and Ford, a majority of ads create a bad user experience, which is the real differentiator between demand sources (for example, advertising networks, advertising exchanges, etc.): most programmatic demand partners will have similar campaigns but different technological capabilities. For publishers, the main challenge then is how best to cope with programmatic ads, which often create these bad user experiences.

In a practical view, the user experience is an economical calculation. Open a possibility to slow-loading ads in a page, then the fill rate will increase, making it more likely a user will see an ad — but more users will leave the page, and you will have a smaller potential view. Hence, SSPs sit just at the right position to manage the user experience of ads.

Furthermore, as the SSP serves the ads it can also analyze them and block ads that do not comply with the publisher guidelines. The SSP is the entity that already manages the monetization, and user experience is part of monetization. The new SSP can and should include multiple user experience optimization tools – from analyzing threat of malware to limiting the number of ad calls to controlling sound and size.

Surprising as it is, no SSP, to date, took this position. Developing this technology is far from trivial. The first to offer a “safe SSP” solution will have a distinct advantage over the rest of the market.

Focus on the Various Online Tribes

The battle between several online tribes is upon us. We have social (Facebook monopoly), search (Google monopoly), gaming (no clear leader), messaging (Facebook, Twitter, Snap, Instagram, and others), and the independent web (the web aside from Google and Facebook). The independent web and the gaming industries are areas where I see the new generation of SSPs helping, as there is no clear leader in these segments.  Gaming and independent web SSPs should help manage and organize them for creating Google/ Facebook type of offering.

In Conclusion

The “classic” SSP market has become too commoditized. The market presents several new challenges that still weren’t solved, and SSPs are in the right position to solve them. The new SSP should include safety and user experience management tools and support any and all advertising formats and platforms. The new SSP is the independent web’s answer to Facebook and Google.

1 comment about "The SSP Evolution".
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  1. Henry Blaufox from DragonSearch, July 27, 2017 at 3:02 p.m.

    Regarding Mr. Napchi's point on the technological barriers SAPs must overcome to manage UX beneficially. Some of them, perhaps many, rely on one development firm to build, maintain and upgrade their systems. So there may be a queue that appears if more than one SSP tries to get this to market.

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