Advertisers are still more likely to buy online video and connected TV manually because of the higher cost CPMs. They are more wary of taking on the risks inherent in the programmatic supply chain, like match rate challenges and opaque fees, Goel said.
By going direct, Activate helps avoid these concerns.
“The consistent feedback that we got for high CPM transactions is…the discrepancy, the latency, the match rate…can all be challenges to moving those high-priced IOs into programmatic,” Goel said.
Both PubMatic and Magnite are trying to pick off buying scenarios that are kind of simple
Ari Paparo, CEO, Marketecture Media.
Also, cookie targeting is less important in CTV deals, which tend to be direct or take the form of programmatic guaranteed, where a buyer has to buy 100% of what a seller delivers. In these scenarios, a DSP is not as necessary, said Ari Paparo, CEO of ad-tech media company Marketecture Media.
“DSPs don’t add enough value to justify their fees,” for CTV buyers, Paparo said.
The focus from Magnite and PubMatic on the buy side can also be interpreted as a response to The Trade Desk’s OpenPath, which carries the risk of the second-largest DSP biasing demand to its own supply, meaning less revenue directed toward traditional SSPs, Paparo said.
“Both PubMatic and Magnite are trying to pick off buying scenarios that are kind of simple. They’re not trying to go after a hard DSP optimization problem,” Paparo said, noting The Trade Desk’s OpenPath is also a simpler solution than an SSP by just aggregating top publishers. “They’re trying to pick off easy stuff and thereby get a foothold and over time expand into more and more technologies.”
Not all SSPs are evaluating the competitive landscape this way. Index Exchange CEO Andrew Casale penned an open letter to DSPs reaffirming the SSP’s commitment to the sell-side, following Magnite’s announcement.
Casale later told Adweek that an SSP cannot serve the buy side without conflicts of interest and that instead, SSPs should make buying open web inventory as cheap and efficient as possible in order for publishers to win back market share from walled gardens.
“We disagree with our peers on how this market gets to its end stage,” Casale told Adweek. “We need to grow the pie. [We] don’t want a few extra points of a smaller dollar.”
