THE ARGUMENT IN BRIEF
Talk of disintermediation can obscure the specific economic changes in programmatic buying. Anil asks which roles are truly being bypassed and whether direct paths improve value or simply shift it.
💥For years, the programmatic industry has been filled with talk of disintermediation, as buy-side platforms and sell-side platforms fight to establish direct relationships with publishers and agencies. But is it all just hype?
Jeff Green, CEO of The Trade Desk, doesn't think so. He believes that the media loves drama and will create stories around his company for clicks. So, are we overestimating the impact of disintermediation?
Let's take a quick trip down memory lane to understand what's really going on with supply-path optimization (SPO).
It's all about creating efficient paths between advertisers and publishers, making sure everyone gets the most out of their money. Over time, SPO has evolved, driven by ad tech companies trying to deliver better results for their partners. Media agencies also jumped on board during the pandemic, committing to closer relationships with fewer sell-side partners. Naturally, some ad tech companies fell behind in this game. Poor performance and lack of transparency led to being left out.
But here's where it gets interesting...
There have been recent moves from DSPs and SSPs that appear more aggressive – aiming not just to sideline weaker players but bypassing them altogether! Or so it seems...
Let's start with OpenPath from The Trade Desk. It allows direct integration between publishers and advertisers without involving an SSP. Some speculated that this was their way of cutting out SSPs entirely, but Jeff Green insists otherwise.
TTD claims OpenPath actually benefits SSPs by sharing bids and asks via Prebid, helping with yield optimization. So, while some transactions can bypass SSPs in certain cases, The Trade Desk won't take over yield optimization.
Now let's turn the spotlight on ClearLine from Magnite and Activate from PubMatic. These products allow agencies to place orders directly without a DSP. They cut out DSPs partially but not completely, as both companies believe DSPs are still essential for accessing premium video inventory. They don't replicate all functionalities but focus on video advertising.
However, there are subtle differences between The Trade Desk's OpenPath and these new products from Magnite and PubMatic.
But wait! Before you jump to conclusions...
These new product launches aren't exact replicas of OpenPath. They offer different capabilities tailored more towards branding approaches and premium video/CTV buying. It's a simpler process that doesn't require all the complexities of a full-fledged DSP.
So, are these companies trying to annihilate each other? 🤯
Not entirely. Ad tech companies often serve both the buy-side and sell-side simultaneously – it's nothing new. Even Google relies heavily on third-party exchanges despite having its own vast supply and demand sources.
However, they are circumventing each other when one side isn't adding much value (which is the whole point of SPO). If an SSP simply acts as a dumb pipe with little value beyond access to demand, why not cut them out? And if DSPs aren't doing much technical work in certain areas like CTV, why involve them?
Convergence between the buy-side and sell-side is increasing naturally as platforms evolve their capabilities. But does this mean we're witnessing the death of pure-play SSPs and DSPs?
What do you think? Are we witnessing a true disintermediation revolution or another programmatic evolution chapter?
Share your thoughts below! 👇 #programmatic #disintermediation #adtech #evolution
FROM THE AUTHOR’S ARCHIVE
Original text from Anil Pandit’s article export. Claims and references reflect the time of writing.
The export does not record a publication date; the creation date is shown above.
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