Explainer: Supply-Side Platform

How it Works: SSPs are at their heart yield optimization tools for publishers. Most began as tools for publishers to juggle ad networks in order to determine the best way to sell remnant ad inventory. With the advent of ad exchanges and RTB, these yield optimizers have morphed into SSPs, integrating audience-based targeting and yield optimization into a single platform. Publishers work with SSPs to sell their inventory through a RTB market to the highest bidder, not through a fixed CPM. The rate is determined by an ad’s potential audience so publishers with premium content that attracts highly desirable viewers can generate high rates for their inventory. SSPs coordinate online consumer tracking with demand-side platforms through cookie-synching, allowing advertisers to target and retarget specific types of consumers who fall into a publisher’s audience category. This allows advertisers to buy access to an audience, not just inventory. Publishers can also create rules for brand safety on SSPs so that they can prevent inappropriate ads from being served or undesirable brands from purchasing inventory.

Who is Doing it: Some leading SSPs that combine yield optimization and sell-side management are PubMatic, Rubicon, and AdMeld. Google recently paid about $400 million to acquire Admeld, which it plans to link closely with its DoubleClick products.

Why It Matters: SSPs have become more sophisticated in the past two years, offering detailed analytics and insights on audience segments, advertisers and campaign yields. This means that publishers using premium SSPs have better data on the value of their inventory and are able to organize content to support optimal ad revenue.

Assessment: A successful SSP with powerful backing, like Admeld, might encourage more publishers to release more premium inventory via RTB as long as the largest companies don’t corner the market and drift into RTB arbitrage. SSPs may also help drive transparency in DSP practices as advertisers and publishers attempt to find a balance between audience segments and pricing.