The Trade Desk, a dominant force in the digital advertising world, is ruffling feathers within the industry as it expands its influence over publishers. Known for its role in helping advertisers buy digital ads, The Trade Desk has recently posed a threat to publisher-focused adtech firms, or "supply-side platforms" (SSPs), which assist publishers in pricing their ad inventory and making it available for purchase. The company has been proactively developing products that could potentially undercut the business of SSPs, prompting concerns among industry insiders.
In February 2022, The Trade Desk launched a product called OpenPath, a tool that allows advertisers to buy directly from publishers without the need for an SSP. This move was followed by an announcement that it would begin undercutting the prices SSPs charge for ads, a decision justified by the claim that SSPs aren’t setting the appropriate prices. The implications of these moves have been likened to the disruptive influence of Google on the digital advertising landscape, and some experts believe that The Trade Desk is reshaping how publishers sell ads, contrary to the firm’s previous positioning as the "anti-Google" of digital advertising.
The Trade Desk’s Growing Influence: A Boon or a Bane?
The Trade Desk, a platform that aids advertisers in purchasing digital advertisements, has been steadily expanding its products and influence. However, this growth is sparking concerns within the industry, with some insiders fearing the company is resembling tech giant Google and upsetting its traditional partnerships.
Breaking Tradition, Attracting Controversy
Historically, The Trade Desk has collaborated with publisher-focused adtech firms, also known as "supply-side platforms" (SSPs), to facilitate online content monetization. Recently though, the company has launched products that directly compete with these SSPs. In February 2022, The Trade Desk introduced OpenPath, which allows advertisers to buy directly from publishers without an SSP. This move is seen as an aggressive challenge to SSPs’ role in the advertisement ecosystem.
Ari Paparo, a former adtech CEO who now heads Marketecture Media, a firm that reviews adtech vendors, opines, "By saying this publicly, The Trade Desk is throwing down the gauntlet."
Resembling Google and Disrupting the Market
This shift in strategy has led to comparisons between The Trade Desk and Google. Matt Prohaska, CEO of Prohaska Consulting, notes that this marks a significant change for The Trade Desk, which had positioned itself as a "challenger brand" for a decade.
The potential casualties of this new strategy are SSPs like Magnite, PubMatic, OpenX, and Index Exchange, all of which could see their fees undercut by The Trade Desk’s aggressive pricing. These firms, which sell online ads for publishers and add a service fee, stand to lose a key revenue stream.
The Trade Desk’s Justification and Potential Impact
Despite the controversy, The Trade Desk maintains that its actions are aimed at curbing unfair pricing practices by some SSPs. The company’s VP of Inventory Development, Will Doherty, even states that they consulted with several SSPs and publishers before implementing these changes.
However, the implications of these changes could be far-reaching. SSPs that reject The Trade Desk’s lower bids could result in their publisher clients seeing less revenue, Prohaska warns. Furthermore, The Trade Desk’s OpenPath is viewed by some, including Shiv Gupta, founder of U of Digital, as a direct competitor to SSPs.
SSPs Fight Back
Despite the challenges, SSPs are not backing down. Major players like Magnite and PubMatic are launching products for advertisers. Adam Soroca, Chief Product Officer at Magnite, insists these new offerings don’t directly compete with The Trade Desk.
"Theoretically, SSPs don’t want to send this information to The Trade Desk," says Paparo, hinting at the tension brewing in the industry.
The Trade Desk’s aggressive expansion and disruption of traditional partnerships underscore the dynamic and competitive nature of the adtech industry. As SSPs fight back and seek new growth avenues, the landscape is set for further evolution. However, amid these power plays, the real concern should be about maintaining a balanced, fair, and competitive market that serves all stakeholders – advertisers, publishers, and adtech firms.