SSPs, aka Supply Side Platforms

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.  Admeld (now part of DoubleClick), PubMatic, Rubicon Project are the largest and most commonly used Supply Side Platforms, though LiftDNA from OpenX, Appnexus, and others provide similar services.

Supply Side Platform Benefits

Publishers use Supply Side Platforms for three primary purposes – first, to bring unsold inventory to many ad exchange markets at once, second, manage the complexity of ad network relationships, and third, 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.