Recently, there has been, let’s say interesting showdown in the AdTech industry between two major players. The Trade Desk (one of the biggest DSPs) and Magnite (one of the biggest SSPs) have begun to annul each other. So now we have a DSP that forgoes cooperation with SSPs and a SSP that bypasses DSPs.
Both sides may call these new developments an attempt but truth is: Disintermediation is in full swing. So, we suggest to take a closer look at this important topic and to stay updated!
The Trade Desk and the OpenPath
It's been a little over a year since The Trade Desk launched OpenPath and started buying ads directly from some of the biggest publishers. And although The Trade Desk claims that OpenPath is only an additional offer, there was excitement around this step. Why that? Because with this new initiative it’s possible to bypass middlemen.
The accusation is therefore that The Trade Desk is using OpenPath to cut out companies that that have helped publishers to sell impressions to advertisers in the past. In other words, when using OpenPath the DSP Trade Desk and the publishers don’t have to rely on SSPs to exchange ad inventory any longer. All publishers have to do, to use OpenPath, is to pay a one-time fee.
And advertisers benefit too, because the OpenPath gives them transparent and objective access to ad inventory. They can buy impressions through fewer intermediaries. And the fewer intermediaries there are, the fewer will take a cut of programmatic spending that would otherwise have gone to publishers.
Magnite and the ClearLine
At first glance, OpenPath looks like a win-win situation for nearly all parties involved– except for one: the SSPs. It was therefore only a matter of time until the sector’s leading SSP Magnite counterattacked. Over the past months they started to explore media trading without DSPs which mirrors OpenPath.
In concrete terms, Magnite recently launched an initiative called ClearLine. ClearLine allows media agencies to buy video inventory directly from Magnite. By only using an SSP to buy video inventory, buyers can lower their tech tax. With ClearLine, there is only one negotiated fee, rather than fielding fees from both a DSP and a SSP. But in addition to lower fees, direct buying is said to offer a number of other benefits: more transparency, a lower risk of ad fraud, and priority access to publishers' inventory.
Do DSPs now have to worry about being excluded? Magnite denies this. They claim is not to remove them from the programmatic equation, but only to create more buying options for their clients.
Same same but different?
Truth is: The Trade Desk’s OpenPath cuts out SSPs while claiming not to and Magnite’s ClearLine cuts out DSPs while claiming not to. What we are dealing with are therefore two former partners becoming competitors by doing the same thing, with a different background. Ultimately both sides claim that they are concerned with transparency and efficiency.
Whether the ideal way to achieve this is to bypass the other side completely is open to question. Whether a DSP or SSP does this job better is also a moot point. But one thing is certain: Both OpenPath and ClearLine are powerful tools that have the potential to transform the entire industry by turning the spotlight on supply chain optimization. And that is a topic that is also very important to us at ConnectAd.
However, in our humble opinion the separation of SSPs and DSPs continues to make absolute sense. We are pursuing a one hop only approach which is a testament of keeping the supply path as short as possible. You can read all about it in one of our latest blog posts.