Agencies are moving closer to supply, and it’s reshaping the programmatic middle layer

The intended deal is just the latest development in an industry-wide shift taking place well beyond identity and data collaboration, with Digiday sources theorizing that developments in early 2026 represent a redesign of the industry’s programmatic middle layer.

For years, the architecture of digital advertising relied on relatively distinct layers: publishers worked with supply-side platforms, advertisers bought media through demand-side platforms, and agencies sat in the middle, stitching the pipes together.

Since the early 2020s, those boundaries have started to blur, as DSPs and SSPs have increasingly encroached on each other’s patch, with sources pointing to The Trade Desk’s OpenPath and the subsequent launches of Magnite’s ClearLine and PubMatic’s Activate as prime examples.

And now, as the decade enters its second half, large buyers themselves are exploring ways to move closer to media supply to gain more control over the economics and data flows, i.e., transparency, hoping to reduce the operational costs embedded throughout the market.

In fact, some say this was at the core of the tensions that arose between Publicis and The Trade Desk earlier this year, with many claiming it’s the biggest issue such operations must grapple with in the coming years.

‘Containerization’

Last month, Index Exchange launched Index Cloud, a new infrastructure initiative that lets ad tech partners run applications directly within its environment. As part of the launch, Bedrock Platform became the first DSP to offer what executives described as a “containerized DSP deployment” running inside Index’s infrastructure.    

The move might sound technical. But its implications go to the heart of how programmatic economics are changing. In an interview with Digiday around the launch of Index Cloud, Andrew Casale, CEO of Index Exchange, told Digiday, “Scale is the name of the game.” He further argued that one of the biggest structural pressures in programmatic today comes from the cost of processing bid-stream data at scale, particularly as more companies rely on public cloud infrastructure.  

Casale described those cloud-processing expenses as a kind of “hidden or invisible tax on ad tech,” saying that companies across the ecosystem — DSPs, data vendors, and optimization providers alike — incur substantial costs simply from ingesting and processing requests.  

“Over the last decade, scale never stopped growing, but partners have started to shrink the amount they want to listen to by capping requests just to manage these costs,” he continued, adding that many ad tech players “have had to become relegated to niche verticals because they just can’t afford to listen to the whole pipe [of media supply].”

In such a scenario, Index Exchange’s solution is to offer a service that lets partners run applications closer to the supply infrastructure, thereby enabling companies to reduce associated listening costs.

Bedrock CEO Shane Shevlin told Digiday his platform’s deployment within Index’s infrastructure reduces data transfer costs and provides it with broader visibility into bid-stream traffic. Such arrangements lower operational costs – compared with moving large volumes of bid requests between separate cloud environments – resulting in savings that his platform can pass along to customers, with media agencies primarily expressing interest in the early phases of its roll-out.

“Agencies’ roles are evolving… particularly as AI offers more opportunities to offer audiences,” he said, adding that while some may question the economics of the holding company model in the agentic era, forward-thinking players will continue to thrive. “Agencies that embrace the latest AI innovations have a lot to bring to the table in terms of putting people together for those types of innovations.”

Agencies rethink ad tech

Such thinking is also reflected among holding company agencies and large buyers, with separate sources reporting executives at such outfits are adjusting their go-to-market strategies.

For example, discussions at Jounce Media’s SPO Summit earlier this year, executives repeatedly returned to questions around supply-path control, transparency and whether agencies should rely less on traditional “end-to-end” buying environments.  

According to multiple people familiar with the discussions at the event, a recurring concern was whether vertically integrated platforms limit buyers’ leverage by concentrating too much control within a closed ecosystem.

One person familiar with the discussions said the issue was less about whether DSPs were technically capable of building direct publisher integrations and more about whether large agencies and sophisticated buyers actually wanted to operate inside such contained systems.

“I’m confident that the largest media-buying teams have people that are thinking about these sorts of dynamics,” added the source, who declined to be named in order to maintain relationships. “But I guess what really counts is whether or not the senior marketing executives [at brands] really care?”

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Meanwhile, a separate attendee described a growing preference among some large buyers for maintaining “preferred routes” to publishers rather than competing exclusively through vertically integrated auction environments where they feel their scaled buying operations lose leverage.  

Elsewhere, larger debates around transparency and control continue. For example, at Digiday’s Programmatic Marketing Summit town hall sessions earlier this month, agency executives repeatedly described frustration with fragmented reporting structures and the difficulty of understanding where fees and decision-making occur across automated supply chains.  

Several participants described DSP transparency as technically possible but operationally difficult, requiring agencies to pull multiple reports and manually reconcile data to understand supply-chain economics. Several attendees voiced the opinion that frustrations such as these have prompted agencies to lean toward models that provide greater visibility into infrastructure, economics and supply access.

Kevin Flood, a partner at investment outfit First Party Capital (an early-stage backer of Bedrock), said agencies are increasingly looking to get “closer to the audience” and closer to supply infrastructure itself. In discussing Bedrock’s deployment within Index Cloud, Flood argued that reducing the separation between bidding infrastructure and supply could allow more value to flow back to agencies and publishers instead of being consumed by operational costs.  

He also drew a distinction between enterprise-grade DSP infrastructure and what he characterized as more limited buying layers attached to some SSP environments. He maintained that many buyers still want independent bidding infrastructure capable of integrating across multiple supply sources, data sets and channels rather than relying entirely on vertically integrated buying paths.  

Ad tech’s crunch questions

The key question now facing the advertising industry’s programmatic media trading sector is whether to consolidate toward fully integrated “end-to-end” platforms or fragment into more modular infrastructure layers.

Major DSPs, SSPs and walled gardens may argue that tighter vertical integration improves efficiency, lowers costs and simplifies workflows. However, many agencies remain wary of ceding too much control to closed buying environments — particularly as media-buying decisions increasingly become tied to proprietary data, optimization logic and now AI-driven workflows.

For some, the emergence of containerized DSP infrastructure and agency interest in more direct relationships with supply-side players represent a fundamental redesign of ad tech infrastructure, rather than an outright rejection of programmatic media trading.

The pipes are still there. But who controls them — and who trusts them — is becoming one of the defining strategic questions facing the market as the 2020s draw to a close, and agentic media trading becomes adland’s default modus operandi.