Scaled Ad Platforms Vs. Smaller Custom Solutions: How To Strike The Right Balance

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 Justin Scarborough, programmatic media director at PMG.

As programmatic media enters its second decade – and a wave of consolidation, fire sales and amalgamations of ad tech stacks change the industry – it is becoming increasingly hard for agencies and brands to identify the right solution for their business needs.

The current approach pits those who work across multiple vendors against those who prefer one enterprise-level solution that most adequately fits their needs. In a contracting environment, there is a limited role to play for vendors not named Display & Video 360, Amazon, The Trade Desk, MediaMath or AppNexus, which isn’t a positive development.

A prevalent issue facing programmatic media buyers and demand-side platforms (DSP) is that they need to decide whether they’d rather be a jack of all trades and master of none or deprioritize others to become the standard in a key area. This leaves very little middle ground. Many technologies, especially vertical- and format-specific DSPs, might excel at one thing but not at everything. On the flip side, there are the omnichannel DSPs that do everything OK but are only the best in one or two areas of programmatic buying.

Five years ago, it was easy for a programmatic buyer to weigh these two options and decide what worked best, primarily because there was differentiation and a bevy of options. Over time, technology and vendors were marginalized, shuttered or rebranded – and larger DSPs copied their capabilities. It’s become more challenging to determine whether diversification or integration into larger, all-purpose organizations is the correct choice. One could work with a giant like Google – which is a fine choice for many brands – but since programmatic is just one of Google’s many offerings, it is unlikely to glean the same level of customization and integrations that an independent partner would offer.

There are a few evaluation points for agencies and brands deciding which path fits their company best. The first of these points is uniqueness. One could spend a month talking to some of the remaining vendors that proclaim to have shiny new objects – and a few years ago, that might have been true – but in today’s reality, they rarely do.

For example, there’s not much unique about buying banner ads; anyone can do it. Google sits on the world’s largest search engine, meaning it has interesting data. It knows what people are searching for, in the same way Amazon knows what customers are buying. The Trade Desk was built for traders and has gone all in on video and connected TV in a way that others have not. From there, companies have to start looking at the aforementioned format or vertical-specific technologies to find the best fit.

Transparency is another key point to consider. It’s surprising to see just how differently each DSP approaches how they clean up things like fees, supply transparency and auction mechanics. Some DSPs will swear it’s baked into their technology and to just trust them. Others are much more forthcoming with this information. MediaMath and AppNexus have really led the industry forward to date, but it remains to be seen how transparent all of the vendors along the transaction path actually want to be.

Moving forward, it’s likely that the consolidation trend will continue to intensify, which is not going to make it easy for brands and agencies to differentiate. And what might be the correct choice now may not even be the same DSP two years from now.

It’s not necessarily a good thing, but eventually there will probably be only four or five players in this space to evaluate. From there, it’s going to be difficult for outliers to figure out their place in the world of programmatic. It all falls back to the idea of exclusivity and going above – what a technology offers that nobody else provides and how they go the extra mile beyond what an omnichannel DSP offers.

Follow PMG (@agencypmg) and AdExchanger (@adexchanger) on Twitter.

 

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