With some of the biggest AdTech shows fast approaching (Exchange Wire #ATSL17, Dmexco & Programmatic IO), I thought it would be a good time to compile a quick guide as to the key events & areas currently shaping programmatic advertising from my own personal viewpoint.

Buy Side

Much has been written about consolidation in the DSP world recently & whether or not it is viable in 2017 to operate both sell & buy side functions collectively. Unlike some commentators, I actually think we will see more DSP's not less in the months & years to come. That said, these DSP's will not be vanilla bidders, they will be rich in 1st party data & have priority access to inventory, either via their own O&O or preferential deals in place with 3rd party publishers based upon the strength of their demand. 

I would imagine we will see existing and independent DSP's in play either be backed by private equity companies who already have vested interests in AdTech or they will be taken out by MarTech looking to get into activation, global publishers looking to better control & scale their off deck monetisation or telcos looking to get into the data loaded bidder game.

I believe you can operate on both sides of the fence, however, only the biggest will be able to do so, those who can offer 1st party data & a GDPR compliant screen agnostic ID to manage areas such as attribution will continue to be able to operate both functions without being challenged, everybody else will have to pick a side & invest accordingly. The days of point solutions that specialize in either video, desktop or mobile I believe are slowly coming to an end, buyers expect their bidders to be screen agnostic & these vendors will have to recalibrate their bidders accordingly.

An article recently published by Lara O'Reilly talks to the fact buyers on the Google DSP DBM will be given the option to buy only from SSP's that will offer a full refund for any fraudulent traffic bought. Although they are not the first DSP to offer fraud free guarantees, they are arguably the biggest so announcements like these help to shape the markets tone. It is practices from vendors on the buy side like this that have resulted in many if not all SSP's adopting or exploring the recent Ads.txt initiative from the IAB Tech Lab that enables buyers to establish if the SSP that is passing a pubs URL in bid requests is actually authorized to sell that domain. Many have applauded the concept of Ads.txt and ComScore publishers are starting to adopt at speed to help them take back control from the fraudsters who have been spoofing their domains in Exchanges & SSP’s for far too long!

Notable & recent DSP deals to be aware of: 

Ok, so who are the tier one independent DSP's still in play? Adform / MediaMath / DataXu / AppNexus (Yes, I am aware AN are more than just activation) 

Sell Side

Where to begin?! Take everything we understood about the sell side 12/24 months ago & press reset! Header bidding has changed the game beyond recognition. It has taken the leading SSP's and made them look average, it has taken the weakest of SSP's and made them look fantastic. It has commoditised access to inventory & some say, effectively migrated the sell sides narrative & value prop of being a yield management partner to that of a feet on the street publisher re seller. 

What does this all mean though? Basically, the sequential publisher waterfall of yesteryear is no more and publishers are letting all demand sources (inc direct in some cases) compete via the practice of header bidding. This means an SSP's value prop is no longer about great account management, QBR's or NASA grade yield management UI's, it is now all about demand & who has the most, and at the best rates…

Ok, so who are the main SSP's and what are they offering from a client side HB perspective?

(Important to note, many of these vendors offer a server to server solution also)

Ok, this sounds complex… if I can no longer use an SSPs position in a publishers waterfall to determine who I should be pointing my demand at how do I select an SSP if they all have access to the same supply via their header tags?

Enter the concept of SPO ‘supply path optimization’ (Brian O'kelley CEO of AppNexus has a great in-depth post on his blog about this practice, I also recently had an SPO overview published on Exchange Wire)

SPO is a practice that agencies & DSP’s are now undertaking to streamline the number of SSPs they are bidding across to both reduce costs & improve overall performance.

Its not only SPO putting SSPs under pressure but new entreats to the sell side also. Step forward TrustX that was coordinated by Digital Content Next (Pub trade body) & built by the renowned engineering team at IPONWEB. Recently endorsed by the ANA, a number of premium publishers are already testing the transparent TrustX marketplace.

What about video & mobile?

Header bidding is still early in mobile. The reason for this is due to the fact a lot of traffic is still originating from App and there is no header in the app. However, the logic of a unified auction can still be applied and many SSP vendors are now rolling out their SDK or tag based in App header bidding solutions for publishers to test & implement.

From a video perspective, SpotX who RTL recently announced were taking full ownership of have been very vocal in their capabilities around video header bidding (differs from desktop due to video players etc) as have leading SSP Index Exchange. One could argue video is the perfect storm for header bidding, limited quality supply & maximum demand, the ideal conditions for a unified auction...

Ok, but what will you be expected to know if somebody pulls you into a header bidding conversation in the hallowed halls of dmexco?

A) The industry is currently debating the pros & cons of running header bidding either client or server side (A lot boils down to latency V audience match rates)

B) Google offer their own version of header bidding, this is referred to as EBDA (Exchange Bidding in Dynamic Allocation) and is available to DFP customers.

C) Facebook recently entered header bidding by launching a header tag that enables publishers to capture FAN demand via header bidding on their mobile traffic.

D) Criteo entered header bidding by offering publishers their header tag (AKA Direct Bidder) that effectively delivers Criteos unique demand into the publisher’s header auction, at a 1st rather than cleared 2nd price.

E) Amazon have launched a server to server header bidding offering for publishers that delivers unique demand and the ability to manage other S2S demand partners for the publisher.

If you want to dig deeper into the details of what SSP's are evaluating & what senior AdTech big wigs will be talking about, research the debate around 1st v 2nd price in the programmatic auction process. Many say 2nd price was relevant in the old days of the waterfall but for buyers to increase win rates & for pubs to increase their yields, the 1st price model should now be the default standard in a world of header tags & wrappers (In my opinion anyway..)

GDPR 

The 'General Data Protection Regulation' act that comes into effect May 2018 has many in AdTech scratching their heads. Many suggest it could bring an end to 3rd party data (How & where is consent collected etc?!) and accelerate the adoption of 2nd party data marketplaces.

At a time when CMO's are asking for a cleaner & more transparent supply chain, the GDPR could be the catalyst required to bring both context & audience together in programmatic buying rather than context arguably taking a back seat to audience.

Either way, those that own a direct relationship with consumers will be in a much stronger position than those that don’t, and for once, premium publishers will be on the front & not back foot when it comes to the programmatic monetisation of their audiences & content.

Expect to read a lot more about the GDPR in the coming months as the AdTech industry figures out what it means to either collect holistic (One process of consumer out reach rather than one for every vendor) or individual vendor consent with consumer for every cookie or device ID that flows through the OpenRTB pipes we have spent the last 10 years laying.

Viewability & Brand Safety

The debate around what is deemed viewable continues to build momentum, the IAB, MRC, clients & agencies all have their own interpretations. The debate will only intensify when we move onto mobile standards (these are yet to be set and we continue to use desktop standards as a proxy)

Things to know?

·     Moat was sold to Oracle for reported number of $800m +

·     PE Firm Providence Equity bought a % of Double Verify giving them a reported value of $300m +

·     Integral Ad Science remain independent (For how long is the question)

Telcos in AdTech

Telcos have what everybody in AdTech wants, accurate; privacy compliant scaled 1st party data.

Teclos increasingly want what many AdTech & publishing companies have, programmatic sell and buy side tools & content creation functions with the ability to distribute at scale. Diversification of core telco revenues can be considered as a main driver for their M&A in the advertising & publishing sectors.

Recent & high profile Telco moves into AdTech & publishing inc:

·     Verizon into AOL / Yahoo to form Oath

·     Telenor into TapAd (Cross device company)

·     Altice Into Teads (Outstream video vendor)

·     Singtel into DSP TURN

·     AT&T reported to be buying Time Warner

That said, not all telcos want to own AdTech or publishing assets and they are increasingly turning to companies to help them extract their data in a privacy compliant way for the activation of targeted advertising. These companies inc but are not limited to:

  1. Smartpipe – Raised $18.75m Series A thus far
  2. ZeoTap – Raised $20m (Post round B raise)

Ok, so what is happening in the DMP space?  

As CMOs have become more fluent in the art of data activation & agencies in the practices of data driven programmatic buying, DMP’s have become very cool & a must have for many..

Current debating points when it comes to DMPs are as follows:

·     Should DMP’s also be in the media buying business?

·     What are DMP’s doing to stay relevant for a world without cookies?

·     Do DMP’s plan to build or buy device graph features / functions?

·     For platforms that process & model a lot of 1st, 2nd & 3rd party data, how will they be affected by the pending GDPR?

Notable DMP M&A activity recently?

·     Adobe bought leading video DSP Tube Mogul for $540m according to reports

·     Oracle bought leading verification vendor Moat ($800m +) & cross-screen player Crosswise.

·     Salesforce bought DMP Krux for $700m

Leading DMP lotame remains independent (For how long, again is the question)

ID Consortium's & Cross-Device Players

Ok, we always read about publisher consortium's (in fact, another German alliance was announced just today on Digiday!) but increasingly, we are starting to read about ID consortium's also.

Why are ID consortium's important?

1)   The GDPR may make it very difficult for a number of probabilistic methods to be applied to digital ID management.

2)   Walled Gardens are using their own proprietary cross-screen deterministic token / people based ID that in many cases only works within their O&O environments.

3)   CMO’s & agencies in the future will not be requesting a cleaner supply chain, but a universal ID (or ID clearing house) that will enable them to manage reach, frequency & attribution across all of the partners they buy from. Audiences are transient, not a single publisher, search engine or social platform can claim to own any 100% exclusively (Happy to be corrected)

Ok, so who are the main players looking to address universal ID’s be it probabilistic or deterministic?

·     The DigiTrust - This technology solution creates an anonymous user token, which is propagated by and between its members in lieu of billions of proprietary pixels and trackers on Web pages. Many leading AdTech companies are already working with the DigiTrust team.

·     AppNexus ID consortium - Launched to power a people based ID mechanism in May (Name TBC), it has the backing of leading AdTech vendors inc Index Exchange, LiveRamp, OpenX, live Intent & Rocket Fuel.

Consortium's aside, when it comes to ID management, there remain a number of scaled independent cross-device companies in play working with clients directly, agencies, publishers, DSP’s & MarTech vendors and these include Adbrain, Screen6 & Drawbridge, all worth speaking to in Germany if you want to get a better understanding of the ID landscape that is unfolding by the hour & day at the moment!

Last but not least Blockchain & Ai

Blockchain

Ok, this is simple, from everybody I have spoken to & the hours of time I have spent reading about it, blockchain is too slow to support the speed in which the OpenRTB infrastructure currently works. When supporting the crypto currency Bitcoin, blockchain can handle roughly 10 transactions per second, nowhere near the volumes needed to support programmatic trading (That trades higher volumes than most stock exchanges).

I would recommend reading a Q&A on AdExchanger with Dr Boris from IPONWEB, often referred to as the smartest man in AdTech and he concurs, blockhain could be a game changer in AdTech but we are not there, yet!

However, there are exchanges that are starting to explore the concepts of futures in digital advertising and these are being built with blockchain in mind, check out the smart NYIAX team based in NYC.

Artificial Intelligence

If somebody starts to talk to you about their Ai powered DSP in the coming months, take a quick glance at their name badge, unless it states they work for Deepmind or Boston Dynamics, make your excuses & leave.

I appreciate there is so much more I could & should have covered, if there are any mistakes, please shout & I will of course correct them... I will focus on DOOH, Audio & Prog TV/OTT in my next round up.

Enjoy what is a great time to be working in advertising & AdTech, see you at ATS London!