“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Ric Elert, president at Conversant.
If the last month is any indication, the future of demand-side platforms (DSPs) is less than inspiring.
Reports show that header bidding may be testing the limits of many DSPs, and questions of transparency still dog the technology. Forrester’s latest Wave report on “market-leading” DSPs doesn’t instill much confidence either, finding very little differentiation among the top six platforms.
The reason? “All the vendors represent the same kind of clients. … Everyone is building their own version of the same thing that clients want,” noted Forrester analyst Richard Joyce.
Forrester’s report and Joyce’s comments should raise a red flag for marketers engaged with a DSP. The commoditization of these platforms is happening for a reason: In an industry that’s increasingly focused on engaging consumers on an individual level across multiple channels and devices, DSPs use cookies and probabilistic matching, resulting in poor identification and targeting.
They also rely on fragmented profiles from data management platforms (DMPs) and data onboarding partners, creating a limited understanding of the consumer. These inefficient and undifferentiated tactics result in “me too” capabilities across vendors and lackluster performance for marketers. This is a problem.
I’ve built big-data, high-volume platforms, and I know that sometimes you need to find the right partnerships to make platforms stronger. But the limitations that come with solely relying on DSPs are clear.
For example, piecing together a combination of DSPs, DMPs, data onboarders, etc. drives up costs and increases the risk of data leakage and loss.
And DSPs aren’t getting any smarter over time. Given DSPs only activate data but don’t manage it, they are limited by the quality of the data being entered.
Another limitation: Media inventory is accessible to everyone, and it’s the same inventory, so intelligent selection and calibration is necessary.
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Finally, skilled operators are also needed to use the tools correctly to protect against message fatigue, drive performance and promote brand safety.
While Forrester’s report tries to separate the leaders from the strong performers and contenders, what it really says to me is that it’s time we shift the conversation away from a singular focus on DSPs, DMPs or supply-side platforms. This fragmented ecosystem limits performance and efficiency. We need to stop concentrating on tools and features. Instead, we need to talk about the optimal ways to break through to consumers throughout the customer journey.
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