The advertising business has long been notorious for the amount of head-spinning three-letter acronyms that haunts the industry. Take for instance CPC, CPM, CPV, CPA, SEP, SMO, ROS, PPM, TM, RON SEM, SEO PCC, and the now ubiquitous RTB. In the advertising technology world, the three big ones have historically been the Demand-side Platform (DSP), the Supply-side Platform (SSP), and the Data Management Platform (DMP).
Having been in the advertising world since the 90’s, entering 2015, it’s clear that the three-letter acronym (TLA), at least from Ad Tech’s perspective, has outlived its usefulness. In a world of growing complexity and growing convergence, three letters just don’t cut it. The way we work now requires capabilities shared by both the traditional demand side and supply side of the house, and of course, data is the connective tissue that ties it all together. So, I’m proposing a new term to meet the needs of the 2015 ad technology—the DMPSSPDSP. If said quickly, it rolls off the tongue. Try it.
Or, I suppose the other option is to end our reliance of the acronyms altogether and start focusing less on naming platforms and more on identifying the problems that we’re trying to solve with them. This defines the crux of the situation. Ad Tech’s three major TLAs are merely the proxies for the three distinctive platforms that were once thought to be mutually exclusive. A technology was either built for agencies and advertisers to buy media, or for media companies to sell it, or to house data. You had to pick a side, or more accurately, pick a silo. Today, few would agree that this siloed approach to technology solutions within a clearly united advertising ecosystem is the best way to conduct business. Yet, TLAs still persist.
To understand how we got here, we need to look back. Platforms began in the world of display advertising. As data got bigger and bigger (a.k.a. “big data”), agencies and advertisers needed a place to store it, hence the birth of the data management platform, or the DMP. When display inventory started to proliferate, publishers needed a way to sell excess inventories through exchanges; this gave us the SSP, or supply-side platform. Finally, when agencies needed a way to tap into a complex range of inventory providers and apply data for targeting, the DSP, or demand-side platform, came into being.
Over time, the use and the users of DSPs, DMPs and SSPs have evolved, specifically with the emergence of digital video, and they are quite different technologies than in the early days of display. Clearly, data is integral to everything on both the supply and demand sides. Rather than sitting in a separate platform, it must be integrated into the core of any sales and buying technology, as it’s the connective tissue between devices and the basis of all advanced targeting and measurement.
At the same time, agencies are increasingly using technology to create and manage their own media business, much in the same way media companies did in the past, and are also requiring much of the same functionality traditionally associated with an SSP. Additionally, traditional media companies are now using both online and offline data for ad decisioning, using tools traditionally associated with a DSP — once the sole realm of agencies — to boost the value of their audiences across their collective properties.
With TLAs bombarding the industry, agencies are in fact sometimes confused about why they need an SSP. Or, for that matter, publishers are unsure why they would need a DSP. If you think about it, they’re really two sides of the same coin. Regardless of whether you’re an agency, a brand, or a media company, the need is the same: How do I apply data to a scarce media source and maximize that value against a media campaign. It’s the exact same math problem; the distinctions between DSP, DMP and SSP therefore are fading.
So, the acronym soup problem is in reality simply a by-product of the point-product solution problem. The easiest way around both of these dilemmas is to think and speak in terms of problems and solutions. Everyone in our industry has the same basic challenge, namely: “I have a bunch of campaigns and a bunch of perishable media assets; how do I use data to manage my campaigns against my media assets to achieve a given KPI?”
In 2015, to solve this challenge, we’ll be seeing more of a stacked approach to advertising technology integrating the capabilities of DSPs, DMPs and SSPs. So if my idea for the DMPSSPDSP doesn’t catch on, we’ll need a new way of talking about an operating system that accomplishes the combined tasks of its predecessors. But whatever we call it, this new platform will be liberating; TLAs and the industry’s over-reliance on them now force users down a proscribed path rather than opening up possible routes. Let the possibilities begin.