The Programmatic Supply Chain Isn’t One Size Fits All

The original vision was simple: Programmatic technology was introduced to solve challenges of scale and efficiency across the open internet. DSPs arose to facilitate and optimize all aspects of buying, and SSPs were introduced to facilitate and optimize all aspects of selling. We are still operating within this overly simplistic, category-based view of the digital advertising supply chain, and it’s time to put the days of ‘one-size-fits-all’ behind us.

While the current construct has been great for some companies, particularly those operating within a walled garden context that can use this dichotomy structure to validate their control of the entire tech stack, others in the ecosystem should think about whether they have actually benefited from this model. Rethinking the supply chain will create new opportunities for differentiation and value creation, all while better aligning with the needs of publishers and advertisers and creating a more sustainable ecosystem.

Programmatic is now being applied to a growing number of use cases. Buyers and sellers of digital media should no longer be limited to the previously identified set of constraints. They need the ad tech ecosystem to evolve to put their needs where they always should have been—at the center of tech solutions.

It’s time to cast aside the buckets—and the corresponding terminology—we’ve been using for programmatic technology. Rather than thinking about the alphabet soup of company types, such as DSPs, DMPs, CDPs and SSPs, we should instead start thinking in terms of supply chain components, including:

Media planning
Dynamic bidding
Audience ingestion
Audience targeting
Audience matching
Bidder management
Outcomes delivery
Inventory curation

By shifting to a capabilities versus a business model mindset, we see how the programmatic ecosystem can accommodate a wider array of use cases—a pivot that is long overdue in today’s dynamic digital ecosystem.

Expanding Use Cases, Expanding Capabilities

As programmatic advertising embraces its next evolution—one in which we pivot from delivering on efficiency alone to delivering true customization and added value—the way in which we think about the ad tech stack is going to shift, both in

terms of the use cases accommodated by programmatic, as well as how traditional programmatic media buys are executed. Consider:

Open Market Media Buy

In an open market programmatic buy, advertisers aim to reach their target audience for a set CPM. While this typically includes traditional DSP and SSP capabilities, to bid and scale campaigns effectively we are seeing buyers evolve their supply chains amid increased signal loss. As the ecosystem has shifted away from cookies and other identifiers, the buy side has been feeling the impact in terms of audience matching capabilities. As a result, some buyers shifted audience onboarding and targeting to the sell side, where they’re finding better results. Which begs the question: Do our traditional notions of the supply and demand sides of the equation still hold up?

Maximum Monetization

Publishers should also think about their supply chains and how they can best leverage various technical components to achieve their objectives. Depending on a publisher’s demand strategy, their ideal ad stack setup may differ. One CTV publisher might lean on programmatic technology to automate a successful direct IO business, while another might add a wrapper to their supply chain to unify bidding across multiple SSPs and exchanges. All publishers are not created equal, and their supply chains should not be either.

Commerce and Retail Media

Finally, let’s not neglect the immense impact that the growth of commerce and retail media platforms is having on the programmatic industry. These days, retailers might find themselves in the role of an advertiser, a data owner and a media owner, and programmatic ad tech should be equipped to switch hats right alongside the retailer as needed. In other words, success in commerce and retail media requires a consolidated tech offering featuring a complex set of capabilities that have historically existed across multiple company types. As the programmatic ecosystem evolves to address this increasingly important use case, we will likely find that the traditional constructs are suboptimal.

PRCAI compiles 2nd advisory to help beget best practices while engaging with media

The simple fact is that publishers and advertisers can each have countless different use cases when it comes to their business needs and advertising objectives. They shouldn’t have to shoehorn these needs into a static, one-size-fits-all tech solution. This is 2023. Programmatic has come a long way and should be expected to adapt to the needs of the customers it serves, not the other way around.

Learn more about the new opportunities in the digital supply chain of the future in our new report.

Author: Sudipto Das, VP, Advertiser Solutions, APAC, PubMatic