Commentary

Programmatic Consolidation Shouldn't Signal End Of Innovation

Advertising technology often feels as if it evolves at the speed of light. It was not even a decade ago that brands and agencies first learned about programmatic and demand-side platforms (DSPs). Now many of these technology companies have been acquired, as larger conglomerates look to deliver full-stack end-to-end solutions to marketers.

Regardless of what this consolidation means for Wall Street or investors, it raises a lot of questions from an advertiser’s standpoint. Namely, what happens when nearly every DSP or programmatic platform is rolled up into another company? Is it good for a brand and strategy, or good for the industry, period? Where will innovation come from?

There are no easy or universal answers to these questions. But as the trend of ongoing amalgamations continues, that third question perhaps becomes the most important.

Advertisers, agencies, entrepreneurs and investors -- everyone involved in the ad-technology space -- must understand that consolidation doesn’t signal the end of programmatic innovation, nor the revolutionary spirit associated with it. There is still room for independent DSPs to stake a claim in the market. And it has become the advertiser’s job to ensure the industry continues to push the envelope of what’s possible in programmatic.

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In theory, programmatic platforms were designed to support the seamless integration of various third-party ad-serving technologies. Similarly, trading desks were established to provide an agnostic approach to programmatic media buying.

Some DSPs have transitioned to more of a single tech stack methodology, which can save time with tag implementation, tracking and reporting, but any other third-party ad-serving solutions lose consideration.

Similarly, there are trading desks that now favor a few select platforms, and are not as willing to test out others that could offer alternative solutions. It seems as if it’s becoming very daunting to be an up-and-coming independent DSP and survive in the midst of all of this consolidation.

Yet from a technological standpoint, there is still a need for innovation. There are a few established omnichannel platforms that are predominantly used by agencies and trading desks, so even though this preferential selection and usage may have a lot of to do with consistently strong performance, the idea of programmatic agnosticism has gotten lost. While the end goal is really to keep the client’s best interests in mind, relying on a single platform could ultimately prove to be a disservice.

As change is constant, delivering the best possible campaign for a client will increasingly require the use of an alternative platform or a specialized technology. Programmatic moved to predictive, making artificial intelligence a necessity.

Even taking a step back, it’s clear our addiction to smartphones led to a rise in mobile media consumption. The “traditional” desktop DSPs took notice of this trend, and expanded their targeting capabilities to deliver ads on mobile devices and even leverage cross-device capabilities. However, some DSPs were conceived and built to solely operate on mobile, which has been beneficial for certain advertisers.

Consider the future of media as well: over-the-top TV, virtual reality, wearables and personal assistants are gaining market share, and some DSPs are going to do better than others in building out technology for these channels. Boutique, independent buying platforms are not out of the question, and may emerge to provide exponentially innovative solutions. For something like VR, which is so different from a traditional online experience, we could very well see VR-specific DSPs appear in order to guide the way into the new channel.

The current consolidation trends should not be the end of choice in programmatic. Even though we have big behemoths, there is a major need to push for conceptualization and innovation that has not been done before.

In order to reach consumers, marketers should also experiment with multiple DSPs. An independent spirit and entrepreneurship are still of the utmost importance in ad tech, where companies that are nimble can provide alternative perspectives to approaching advertiser problems and delivering solutions.

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