The Evolution Of The Supply Side Platform

on The Future Of Publishing

Since 2007, the media industry has witnessed the evolution of the supply side platform (SSP) from a software for optimizing online ad sales to a full-stack revenue solution.

In its most basic form, a supply side platform is a software that helps publishers make money selling ads.

That said, the way in which supply side platforms have made publishers money has greatly evolved over the years. What started as manual ad network optimization has transformed into full-stack software solutions continuing to disrupt a $150 billion industry.

Here's how it all began.

Phase 1: Ad Network Mediation

The original supply side platforms Admeld (founded 2007), Rubicon Project (founded 2007) and Pubmatic (founded 2006) first gained steam with publishers through ad network optimization.

Before real-time bidding became a reality, these companies were taking multiple ad network tags and optimizing impression allocation based on historical performance.

At the time, people were predominantly consuming content on desktop devices, traditional tag-based guaranteed sales were a lucrative source of revenue and publishers were throwing their remnant impressions to whichever ad network was willing to offer them the highest CPM.

With the entrance of Admeld, Rubicon Project and Pubmatic, publishers could maximize their remnant revenue by working with multiple ad networks at once without having to manually optimize each network’s performance — the SSPs would do it for them.

Despite having automated pricing algorithms, early SSPs had an entire yield management team dedicated to manually adjusting various network tags based on historical performance on an individual publisher basis. This was the original SSP model.

Phase 2: The Rise Of RTB

2007 was a big year for SSPs. In addition to the establishment of Admeld and Rubicon Project, a number of today’s leading DSPs were founded: Invite Media (now Google DoubleClick Bid Manager), DataXu, and MediaMath.

While the concept of auction-based buying was being offered by select platforms, many of them were still operating under opaque business models that offered access to only limited sources of inventory (site lists). It wasn’t until 2009 that the major SSPs began announcing their support for RTB, a protocol that was conceived as a workflow solution enabling buyers to scale campaigns and purchase inventory across multiple sources.

RTB offered a way for buyers to purchase inventory on the individual impression level, a capability that was not previously available. It made buyers more efficient in purchasing inventory and more successful in driving campaign performance across multiple exchanges. It offered a solution for DSPs, ad networks, agency trading desks and other media buying intermediaries to leverage data in unprecedented ways, and as a result, RTB quickly became the preferred method of purchasing remnant inventory.

Phase 3: Private Marketplaces And Programmatic Direct

As buyers became increasingly bullish on RTB, the supply side platforms evolved into more transparent, exchange-based business models to capitalize on this growing form of transaction.

Over the course of a few years, RTB-based revenue quickly grew to constitute a majority percentage of SSP-managed revenue. These platforms developed advanced features for publishers that leveraged auction-based insights (see Bid Landscape Reports) as publishers became increasingly savvy with their RTB-based strategy.

As the SSPs matured to offer both advanced network optimization and scaled RTB-based demand, publishers began experimenting with progressive pricing strategies in attempts to further optimize their indirect revenue. One of those strategies was private marketplaces.

Publishers, SSPs, DSPs, and buyers alike quickly realized the incremental value of being able to purchase inventory on an individual impression level using data that was previously unavailable. As a result, publishers began offering select buyers exclusive buying conditions using RTB-surfaced data to add incremental value to their inventory — a strategy that was soon labeled private marketplaces.

This led to the SSPs building support for Deal ID technology, a unique identifier passed in the bid request that enables publishers to offer specific buyers first-party data, private inventory, preferred pricing, or a combination of all three at an agreed upon rate.

Deal ID technology and the rise of private marketplaces added a premium layer on top of the publisher’s open exchange that generated incremental revenue at premium rates and further matured the programmatic landscape.

As private marketplaces gained prominence among buyers and sellers, publishers began adding programmatic line items to their directly sold proposals.

Soon, platforms such as iSocket and Shiny Ads emerged as technologies that enabled publishers to offer guaranteed deals using software as a means for transacting. These platforms integrated directly with publishers’ ad servers to surface insights like inventory availability. They also enabled buyers to more efficiently reserve a fixed amount of inventory from a specific publisher, and traffic creative assets directly into that publisher’s ad server.

With the emergence of automated guaranteed software, publishers had the ability to manage and sell their inventory using programmatic solutions at all tiers of the stack — direct down to remnant. And with the establishment of full-stack, programmatic solutions built around the buying and selling of banner ads, it ultimately came time for a new wave of disruptors to enter the market...