The demand-side platform (DSP) category underwent expected consolidation in the past year, with The Trade Desk’s IPO and formerly independent players like TubeMogul, Turn and Adelphic gobbled up by Adobe, Singtel and Time Inc., respectively.
But just because the DSP space has matured doesn’t mean it can’t surprise you.
This year, that surprise comes from Amazon, whose Amazon Advertising Platform (AAP) surpassed Google’s DoubleClick Bid Manager (DBM) to be the most-used DSP, according to 800 demand-side marketers (with a roughly 60/40 split between agencies and brands) surveyed by the advertising analytics firm Advertiser Perceptions for its annual industry report.
The ecommerce giant “doesn’t go out with great fanfare like other marketing engines do,” said Advertiser Perceptions Chief Strategy Officer Kevin Mannion. “It was a real surprise for us, and we rarely say that because we feel we know where the arrows are pointing.”
In previous iterations of Advertiser Perceptions’ report, the researcher didn’t even include Amazon. But last year, 40% of all brand and agency respondents said they had spent with the platform’s DSP, while DBM came in second with 36% penetration before a 10-point drop to a field of smaller rivals like MediaMath, Rocket Fuel, BrightRoll and AppNexus.
Mannion compared AAP’s adoption to the quiet rise of Amazon Media Group (AMG), which shocked clients five years ago when it was introduced to Advertiser Perceptions’ display advertising benchmark report and turned out to be a category leader. “It’s now something that has to be built into how you look at the space, because there’s a real trend where Amazon ad tech flies under the radar until it’s dominant.”
Amazon’s overall market adoption is propelled by its unmatched brand in-roads, said Emmy Spahr, director of programmatic at the Publicis Groupe agency SapientRazorfish and a respondent in the Advertiser Perceptions report. “Amazon’s usage rate took me by surprise too, but if you think about it, any brand where customers are purchasing on Amazon is going to be a great fit for the DSP.”
Inversely, The Trade Desk was able to gain steam and surprise incumbents because it had a piece of the market where it was strong (holding company agencies), without broad adoption across all marketers, she said.
Amazon wasn’t the only dark horse to surge in Advertiser Perceptions’ report.
AppNexus scored higher than any other DSP in the area of “innovation and road map,” a new category that measures how well a DSP communicates its value to ad buyers. It also did well on “reporting features” and “troubleshooting capabilities.”
In general, AppNexus “seems to have significantly strengthened its position from earlier iterations of this study, in terms of how advertisers are thinking about them.”
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When asked which would be a preferred single DSP, Amazon and AppNexus are the two highest ranked DSPs among ad buyers. However, the average brand or agency employs between three and four buying platforms, and Mannion said “the idea of using just one is purely hypothetical.”
And DBM is the runaway leader for stack-driven marketer criteria like “reporting features,” “API and integrations” and “forecasting tools.” But when it comes to indicators of account relationships – like communicating a road map, “QA/troubleshooting,” “understanding client needs” and “ability to work across client relationships” – challengers like The Trade Desk, AppNexus and MediaMath overcome the industry’s 800-pound gorilla.
There’s “going to be a real winnowing” of DSPs not owned by a walled garden, telco, enterprise cloud or media company, but beyond that, it’s hard to know how the crowded field will shake out, Mannion said. “For now, differentiation is a critical challenge.”
