Five Reasons that DSPs Should Prioritize the Direct “Deal-Based” Market in a Privacy-Centric World
by Doug Huntington
In an earlier post, we examined how the death of third-party cookies might impact DSPs and their ability to thrive in a privacy-centric ad ecosystem. Given the current state of industry flux, DSPs are looking for innovative ways to “future-proof” their business models and provide differentiated value to their customers.
Our contention is that the market is ripe for “deal-based” transactions. By connecting directly into the publisher’s system of record for inventory and price discovery, as well as deal origination through programmatic pipes, DSPs can become far less reliant on the open market to achieve the rapid revenue and transaction growth to which they have become accustomed. It will be a strategic way to offer highly differentiated services to their customers, eliminate many of the issues that have historically plagued programmatic advertising, and open the opportunity for true collaboration between premium publishers and advertisers.
Based on conversations with both the demand and supply sides, we offer five primary reasons that DSPs should develop these connections and expand beyond the open market:
Supply Path Optimization (SPO) - Privacy, quality, fraud, and high transaction costs are largely eliminated by creating a more direct path to supply. Connecting directly into the publisher’s system of record for “deal-based” transactions increases transparency and control for both parties and enables a more collaborative approach to media planning and measurement between trusted partners.
Access to “top of funnel” premium inventory - Programmatic advertisers should not be relegated to just the “leftover” inventory and would greatly benefit from “unfettered” access to all of it, including the “really good stuff” typically only accessible through the publisher’s “traditional” direct sales channel.
Exclusive access - The opportunity to enter into “exclusive” arrangements with premium publishers for highly desirable inventory changes the game and strategic importance of how programmatic advertising is perceived and used.
Campaign certainty - Both sides of the market benefit from certainty in terms of campaign fulfillment levels and transparency in the form of impressions, reach, placement, and budget guarantees.
Increased market opportunity - By connecting directly to the publisher's operating system to support programmatic execution of “direct” deals, DSPs can shift brand dollars and other types of advertising budgets that are typically executed through “traditional” sales channels to their platforms.