SSPs are Dead.
Admeld. Dead.
Pubmatic. Dead.
Rubicon. Dead.
Niedermeyer. Dead. (anyone?)
SSPs (supply side platforms) began to emerge in 2007 to help large publishers “YIELD OPTIMIZE” demand from ad networks—all 400 of them.
It was a great pitch: Mr. Big Publisher, you utilize 20-70% of your inventory to make 80% of your revenue from direct sales. Let me manage all the second channel (remnant) demand via ad networks—you’ll make more because I the SSP know how to “YIELD OPTIMIZE” among this crazy world of 400 ad networks.
The YIELD OPTIMIZATION business—the reason for the creation of SSPs—is Dead. Finito. Over.
Ben, Rajeev, Frank—before you lunge for the phone (or lunge at me), I’m actually going to explain to everyone your bright future. Bankers please get your pencils ready.
SSPs are now Exchanges. There has been a buzz word merger. Someone tell Terry Kawaja so he can adjust his bubble chart (bubble chart, get it?).
Effective immediately all digital media executives are to cease and desist all usage of the acronym S.S.P. and use the fully formed noun “Exchange”.
Optimization has moved to the buy side.
Real Time Bidding enabled supply (otherwise known as Exchange) allows all RTB buyers—ad networks, DSPs, agency trading desks—to bring their own optimization to the table. RTB caused the death of SSPs and their emergence as exchanges.
In fact at a recent conference, Admeld’s own Ben Barokas said his business has shifted from 15% RTB/85% YIELD OPTIMIZATION in January 2010 to 54% RTB/46% YIELD OPTIMIZATION in January 2011. At best, yield optimization is a legacy business among SSPs.
OLD: SSPs
Admeld
Pubmatic
Rubicon
OLD: Exchanges
AdX (Google)
CONTEXTWEB
OpenX
NEW: Merger to Exchanges—all RTB Enabled
Admeld
AdX (Google)
CONTEXTWEB
OpenX
Pubmatic
Rubicon
Google did not buy Admeld the SSP for $400 million. Google bought Admeld the Exchange for $400 million.
See my earlier post Google, Admeld & The Need for Diabolical Liquidity.
What do you think? Leave a comment below or contact me.
[These views are my own. If you want to speak with CONTEXTWEB in regards to RTB, go here.]
Thanks to DOH for the movie reference.
Jay Sears 
I’m going to have to go ahead and disagree with you. An exchange is certainly useful – although I would call it a marketplace – but exchanges are too narrow for what publishers actually do when they conduct business. A stock exchange for example allows parties to buy and sell securities but does not by itself guarantee that either party is trustworthy – securities ratings and verification are separate functions provided by other entities. You can sell all day long on an exchange, but the bookkeeping, reconciliation and filing taxes (ugg) for your business isn’t going to be done for you by the exchange – that’s up to you. These and other functions needed in the online advertising world – from the perspective of a publisher conducting business – create a total solution that needs a more descriptive name and I think “platform” fits that pretty well.
Also, you are right that buyers have always been using their own optimization, but optimization which is “buy side maximization” is just “sell side minimization” when you don’t have a publisher champion in your corner. An exchange is just interested in deal flow – but a publisher platform delivers much more.
[…] Leaders from companies across the online advertising spectrum, including top publishers (like NBC, Weather.com, WebMD, Trulia, CareerBuilder…), agencies (like Vivaki, Cadreon), DSPs (like Turn, MediaMath, Appnexus), ad networks (like Ad.com, Undertone, Criteo), data companies (like TargusInfo, Exelate, BlueKai), buyers (like Amazon, Seamless) and ecosystem influencers (there’s no one like Luma Partners, AdExchanger or Comscient), who will discuss what’s required to move the industry from good to great. Even the guy who said SSP’s are dead will be there. […]
You might be on to something Jay…although I would argue that in order for SSPs to truly be exchanges, more of the participants need to be counter parties on both sides of the trade. How many SSP publisher clients are performing audience extension and using other publishers’ inventory to satisfy demand? Until they do that en masse, SSP still seems appropriate.
[…] Project has added three executives — including Jay Sears from ContextWeb, who recently declared the supply-side platform model “dead”– as competition among the major SSPs […]
[…] Leaders from companies across the online advertising spectrum, including top publishers (like NBC, Weather.com, WebMD, Trulia, CareerBuilder…), agencies (like Vivaki, Cadreon), DSPs (like Turn, MediaMath, Appnexus), ad networks (like Ad.com, Undertone, Criteo), data companies (like TargusInfo, Exelate, BlueKai), buyers (like Amazon, Seamless) and ecosystem influencers (there’s no one like Luma Partners, AdExchanger or Comscient), who will discuss what’s required to move the industry from good to great. Even the guy who said SSP’s are dead will be there. […]