Supply Side Platforms, or SSPs as they are commonly known in the digital advertising community, are an emerging category of technology companies that are in the business of optimizing various types of advertising demand for publishers, including demand from traditional ad network as well as the newly-minted ad exchanges using real-time bidding. Doubleclick AdX (formerly Admeld), Appnexus, and Rubicon Project are the largest and most commonly used Supply Side Platforms, though OpenX, Index Exchange (formerly Casale), PubMatic, Sovrn and others provide similar services.
Supply Side Platform Benefits
Publishers use Supply Side Platforms for three primary purposes:
- To bring unsold inventory to many ad exchange markets at once
- To manage the complexity of ad network relationships
- To provide a suite of tools and reports on both sets of demand.
By using a supply side platform to represent their inventory on an ad exchange, publishers are able to sell their impressions to the highest bidder, and access thousands of new advertisers that might not ever buy from the publisher directly. The idea for publishers is that the more sources of potential advertisers, the more revenue they can make. Ad exchanges also make it easy to sell a variable amount of inventory at any time to a long tail of thousands of advertisers. Because machines instead of people handle every transaction, a publisher can just as easily sell 5 impressions to a small mom and pop shop as they can 5,000,000 impressions to a global brand.
In terms of network demand, Supply Side Platforms provide a programmatic way to deal with ever-changing network fill rates and yields. For example, many publisher have a variety of ad network buying their inventory, but are in a situation where one network will pay a $2.00 CPM but only fill 20% of the time, another network will pay $1.00 CPM and fill 70% of the time, and a final network that will only pay $0.50 but fill 100% of the time. Each ad network might also have requirements like maximums per day, only want impressions from specific geographies, and may have different levels of latency or discrepancies. Instead of trying to manually figure out which order is best, SSPs provide technology that predicts which network will provide the highest effective yield when all factors are considered and then constantly adjusts which tag serves on a regular basis, usually every few minutes. This solution limits latency, increases yield, and takes a huge burden off ad operations teams. In fact, before the days of ad exchanges and real time buying, SSPs were called Network Optimizers and dealt exclusively with managing Ad Network relationships that the publisher already had.
Key Supply Side Platform Features
Supply Side Platforms are constantly expanding their capabilities, but at their core should provide a few key services.
- Access to multiple sources of supply: Any publisher could easily sell their inventory on an ad exchange, but SSPs add value by connecting a publisher to a broader set of demand and auction the same impression across multiple ad networks and to buyers across on multiple ad exchanges simultaneously.
- The ability to block certain advertisers from buying their inventory: Publishers may not want to let certain advertisers buy their inventory for a variety of reasons – perhaps the site is family friendly and doesn’t want ads for beer & liquor companies, or wants to ensure their competitors can’t place ads on their site. Supply Side Platforms should enforce these rules and preferences on the auction process.
- The ability to set price floors: While the second price auction theoretically provides an efficient market and encourages advertisers to bid truthfully, in some cases the publisher may want to enforce higher prices on a particular buyer. For example, a publisher might want to ensure that their existing customers can’t buy them more cheaply through an exchange than directly.
- A suite of reports to enable the publisher to see who is bidding, what they are paying, and how much they are buying: reporting is a key for any SSP to understand who values their inventory, and what it is worth on the open market.
- Knowledgeable service & support staff: the ad exchange ecosystem is a complex one, and publishers would do well to put a high premium on partnering with a platform that has the time and talent on staff to help advise them on how to approach this emerging market in a way that fits their overall business needs.
Are these SSPs not just selling to DSPs? It sounds a lot like what happens simply when a DSP bids on an Ad Exchange.
Hi Brad,
SSPs manage demand from a variety of sources; DSPs that bid through Ad Exchanges are part of that demand, but a major benefit of using an SSP is that it manages the demand from multiple ad exchanges, as well as non-RTB demand like ad networks simultaneously. So in the case where you might have three bids from Exchange A, two bids from Exchange B, and five bids from standard networks, you have a system that can decide out of the lot. Make no mistake, RTB is growing at a rapid pace, but for many publishers RTB is perhaps 50% or less of their revenue from indirect sources, so networks are still important, as is the demand that comes through ad exchanges but doesn’t originate at a DSP. For example, AdWords display demand would be a major example of that category.
Ben
Ben,
Thank you for this amazing resource of a website you have.
I been trying to understand the difference between ad exchanges and SSP. From what I get, SSPs have more sources of inventory than ad exchanges and also have better reporting and features?
Hi Tommy,
Thanks for the support! Generally speaking, I would say ad exchanges have more inventory than a typical SSP. That said, some SSPs like Rubicon and PubMatic are enormous, and have comparable inventory. SSPs differ from ad exchanges in that they serve the publisher’s interest only, while ad exchanges are neutral parties. The SSP may have technology that allows the publisher to set floor prices, and may have optimization algorithms that try to get DSPs and ad networks to pay more than they otherwise would through a strict 2nd price auction model that the ad exchange would run. To use financial parlance, an ad exchange is like the NASDAQ, while an SSP is like a hedge fund. One does’t take sides in the transaction, it just facilitates them (the exchange), while another tries to maximize revenue in the transaction for just one party (the SSP).
Hope that clarifies –
Ben
Amazing information, thank you very much Ben.
So the various bid possibilities I am seeing are:
1. Network can bid with a publisher
2. Network can bid with an SSP
3. Network can bid on an Exchange
4. DSP can bid with an SSP
5. DSP can bid on an Exchange
6. DSP can bid with a publisher
Q: Can an Exchange bid with an SSP? Or is the job of the exchange mainly to serve as a market maker or specialist i.e. match the bid and ask price (+ a margin) OR buy and sell from its own inventory to create a market?
Q: Does RTB mainly happen through an exchange? Or do DSPs and SSPs have RTB with each other?
Q: It makes sense for non-digital media (TV, Radio) also to work through an exchange possibly in real-time fashion, does such a mechanism exist?
Hi NK –
Let me see if I can answer your questions:
1. Yes, although networks usually don’t “bid”, they just buy with regular ad tags. If a network is bidding, it’s probably more appropriate to label them as a DSP.
2. Yes, same qualifier as above.
3. Yes, same qualifier as above.
4. Yes
5. Yes
6. Yes, although if the DSP is bidding specifically with a publisher, they are likely going through an SSP or Exchange to do so. The difference between this setup and 5 / 6 is that the DSP could be leveraging a private exchange setup, whereby the publisher has agreed to provide the DSP (or more likely an Advertiser using a particular DSP) access to unique inventory, or with preferred pricing.
Q1: No, an Exchange simply creates liquidity in the market. If you think of RTB like the stock market, the Exchange plays a similar role as the NYSE or NASDAQ in that it enables a marketplace without taking a position in it. An SSP is more like a hedge fund, because it has a financial interest to serve one side of the transaction, the publisher. Generally speaking though, Exchanges and SSPs do more or less the same thing in the market in that they aggregate inventory for buyers.
Q2: DSPs can buy through an Exchange, or with an SSP. When the DSP buys from an SSP, it does not necessarily have to pass through an exchange, though it can. DSPs and SSPs often create direct relationships so they can simplify the technical complexity of integration, add new features (like private exchanges) to the market without being dependent on the exchange, and of course, reduce latency in the bidding process.
Q3: Absolutely it does (although many would consider TV a digital medium now given the distribution model) which is part of the reason why many people are so excited about the concept of RTB. There are some complexities to solve here, as this MediaPost article notes in particular for TV: http://www.mediapost.com/publications/article/195246/, but I think they will eventually fall, even if it takes many years. There’s no reason that the bidders and exchanges in place today couldn’t handle requests that deliver onto digital TVs or Radios if the infrastructure was in place. The exact same systems already work for display, mobile, and online video today; it’s all just servers talking to one another.
Hope that helps –
Regards,
Ben
Hi Ben – first, love your site!
Was wondering if you could speak to how the SSP interacts with the pub side ad server? Do pubs traffic all their direct buys first via 3P ad tags, then stick SSP tags in to represent all indirect? And in the SSP would go all the ad exchange/network tags… or possibly even S2S bid requests direct to DSP integrators? Which means pub server still manages the prioritized direct deals, then lets the SSP fill the rest.
Assuming it’s something like above, seems a pub could theoretically put SSP tags directly on site and eliminate the pub side ad server (assuming they didn’t have any direct buys). Is that on the right track?
Thanks!
Hi Sean,
Sure – have you read this post yet? http://www.adopsinsider.com/ad-serving/diagramming-the-ssp-dsp-and-rtb-redirect-path/
To get a little more operational about it, publishers get 3rd party tags from their SSP vendor, and traffic them in their ad server just as they would any other campaign, but typically at a low priority so that any direct campaigns serve to quota first. In terms of the SSP, you’re also essentially correct that the SSP is just another ad server with tags that call networks, or API-based calls to DSPs that are directly integrated. I imagine it’s not quite as user-friendly as DFP’s UI for example, but that it can be tuned to route volume in certain ways if necessary.
I think what’s changing for the publisher right now though is that while it used to simply be a matter of prioritizing all direct campaigns ahead of indirect in a straightforward waterfall, publishers are now seeing that some programmatic revenues pay higher rates than directly sold campaigns. So it’s sometimes to their benefit to prioritize certain programmatic partners above their direct campaigns to earn more revenue. Most publishers probably still have the basic waterfall approach in place, but I see it changing.
In terms of if you can put SSP tags directly on your site and eliminate the ad server, yes I don’t see why you couldn’t do that, but you’d lose all the benefits of an ad server, like prioritization, targeting, pacing, reporting, etc. Given the free ad server options out there and how easy they are to use (i.e., DFP Small Business), I’m not sure why you wouldn’t use an ad server to abstract the SSP tags. That would be my recommendation to you, at least.
Ben,
I’ve read many articles on your site and I love them. Thank you so very much for the insightful information!
I understand ssps aggregate different publishers’ inventory and sell to different exchanges/dsps. Since many large ssps like Doubleclick, Rubicon Project, and Openx all run their own exchanges, do they still sell their inventory to exchanges other than their own? For example, do Rubicon Project sell inventory to doubleclick’s exchange?
Secondly, can a large publisher (say NY Times) use multiple ssps and allocate centain percentage of their whole programmatic inventory to different ssps? Or the publisher typically works with one ssp and that ssp becomes the only access point for the publisher’s inventory?
Thanks much in advance!
Thanks Gerald!
Good questions – so what’s often confusing about this industry is that some players are known for one type of technology but can actually play many different roles. Specifically, DoubleClick and AppNexus are broad platforms that service both publishers and advertisers, so they can play the role of DSP and SSP. So you would expect to see Rubicon selling on DoubleClick’s exchange, for example, because DoubleClick represents a major source of advertiser demand. You would not however expect Rubicon to sell on PubMatic’s exchange, because both PubMatic and Rubicon are strictly a source of supply.
In terms of working with multiple SSPs, yes publishers can and do work with many different SSPs because they are better at monetizing certain types of demand. Index Exchange for example is a Canadian based company and has strong ties and relationships in that market that others may not be able to replicate. DoubleClick has the unique demand AdWords, and thus can often fill at better yields and overall amounts in less established markets like Africa and Latin America. Many other publishers work with many SSPs in a waterfall like setup described here: http://adexchanger.com/the-sell-sider/the-programmatic-waterfall-mystery/
And recently, header bidding integrations have made it easy for a publisher to work with multiple SSPs in parallel rather than a waterfall (sequential) approach, though this is still a leading edge way to integrate for most sellers in the RTB market: http://www.adopsinsider.com/ad-exchanges/header-bidding-holistic-ad-serving/
Hope that helps!
Ben
Ben,
Thanks much for your insight. It’s very helpful!
I understand some ssps are better at monetizing certain types of demand, e.g. Index Exchange and DoubleClick. But is this still true for the most of the major ssps/exchanges, i.e. AppNexus, Openx, Rubicon, and Pubmatic? Are they really different at monetizing different types of demand, given that they probably all integrated with all the major dsps/buyers?
As far as the recent development of header bidding, it seems it is a good thing for the independent ssps/exchanges but a disadvantage (or no more privilege) to DoubleClick’s dynamic allocation? If yes, then would this new development change the competitive landscape among the independent ssps/exchanges in any way?
Your comments would be greatly appreciated!
Ben,
Not sure how to pose this question as I’m new to this programmatic arena. We are a publisher and I’ve been in print and digital media for a long time and the bench marks of measuring success seems so much easier than in programmatic. Within the last year, we’ve established our audience segments, hooked up with Krux, Rubicon and TTD, we also use DFP, and while we are hitting some sales goals, I’m at a loss of how to measure successful performance (based on comparing CTR with DFP, our segments are not doing well). How do we know if we’re on the right path? What resources or communities are out there to discuss with other companies struggles and successes? How do you do a “check-in” to see if what you’re doing is working? The other issue we have is our site traffic (desktop and mobile) is seasonal. The majority of our traffic is Dec – Feb, so how do we capitilize on that in our audience extension or retargeting in the “off” season? I have so many questions and feel like there are no resources out there, so any insights you can offer on how to figure this all out would be great.
Hi Tina,
I’d recommend two things to you – first, visit the Ad Ops subreddit, and second, consider attending an Ad Monsters event. The former will give you some immediate and anonymous help that can be quite tactical in nature, while the latter will help you establish a network of people coping with similar issues.
The Ad Ops subreddit also has a Slack channel which is active, so I’d encourage you join that as well. Instructions are on the subreddit sidebar.
Poke around there, ask some specific questions, and I think you’ll find some help. I’m active in those channels myself so I chime in as well.
Good luck!
Ben
SSPs specialize in matching up all their advertisers with their publishers – but optimizing conditions for the publisher.
On the buyer side, advertisers, through an automated bidding process, bid for ad placements that best matched their criteria like geography, gender, income level, and more (see why data is so very important?!).
So the better publishers can match their inventory to advertiser demand the higher the CPCs or CPM bids go and that directly increases the earnings of both the publisher (you – if we got our targeting right) and the SSPs. Yes. Insatiable, automated capitalism at your service.
You can read all about it here: https://www.adngin.com/blog/website-monetization/too-small-for-most-ssps-top-5-supply-side-platforms-to-try/
Thanks for these invaluable information you share.
I am wondering what an SSP salesman do. I mean when an SSP company connects with all adexchanges, ad networks and DSPs in the market, an SSP salesman just find new publishers like an ad network. I wonder if an SSP company only consists of couple of enginieers to write scripts. Can you explain more the bussiness model?
Thanks in advance.
Hi Suleyman,
You might be talking about two different roles; sales teams at an SSP typically sell the SSP’s technology platform to other publishers. That is, they sign up supply for their exchange and compete with other SSPs for the same publisher inventory. Then you’ll have people who work the other side of the market, and try to integrate with bidders who will buy that supply. I would characterize the bidder / demand side more as business development people though, since typically there’s no fee for buyers and the SSP makes money by taking a small cut of every ad publishers on their platform sell, usually in the 10 – 20% range. Meaning, if a buyer pays $1.00 for a publisher’s inventory, the SSP gets something like $0.10 to $0.20, depending on the contract.
SSPs employ software engineers, product managers, UX designers, service and support people, sales people, business development people, account managers, and the usual back office folks like accountants, HR folks, and lawyers.