Magnite and PubMatic’s recent SaaS proposals herald ad tech’s shifting sands

The shifting sands of the $630 billion digital advertising landscape have seen the leading lights of independent ad tech jockey for position amid an uncertain future.

In the past 18 months demand-side, and supply-side platforms have altered their propositions in a manner that blurs the lines of the traditional media-trading sector with The Trade Desk’s OpenPath, arguably the starter-pistol.

Meanwhile, the industry’s leading SSPs have made similar moves with Magnite and PubMatic both launching their respective “buy-side offerings” earlier in the year. 

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All of these moves are widely interpreted as heralding a near-future when the (historically complex) ad tech landscape is less numerous with The Trade Desk’s recently signaling that it will no longer let publishers and SSPs ‘dictate’ pricing strategy a further sign of intensity ratcheting up.  

Earlier this year, Digiday reported that PubMatic was proposing an “Access Membership program” for publishers with sell-side sources, whom declined to be named, further claiming that Magnite has proposed a similar offering more recently.

Neither party went into much detail when probed by Digiday — such as whether any trials are currently underway — albeit sources at the SSPs spoke of the opportunity to evolve toward revenue models more akin to software pricing.

When asked directly on such moves in August 2023, PubMatic CEO Rajeev Goel told Digiday he “does not have anything to share” in terms of product announcements but added that “we’re always experimenting and exploring new product opportunities with our customers.”

Equally, sell-side sources, who similarly declined to be named, told Digiday that Magnite has been mooting “service fees,” or “seat fees,” in addition to taking its historic percentage of media fees, as well as it revenue-share for programmatic traded ads. 

When asked to clarify such reports, A Magnite spokesperson similarly acknowledged the company’s appetite for experimentation in an emailed statement, but declined to offer any specifics of its intentions.

“Magnite offers a dynamic pricing model,” it read. “Seat fees have long been part of the pricing structure for our business and there are various tiers based on the level of technology and services our customers utilize.” 

While initial proposals from both companies predate July 2023, they come at an interesting time, especially in the wake of Magnite and PubMatic’s respective decisions to implement contractual terms over sequential liability in the wake of the MediaMath bankruptcy. 

The MediaMath flameout left both players short — PubMatic for $10.4 million and Magnite for $12.6 million — but ultimately, it was publishers who were ultimately left out of pocket, and sources noted that media owners will likely be wary of additional ad tech fees from the pairing in the near future.

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Somewhere amidst all this uncertainty in the ad tech sector, publisher nervousness has transformed into cautiousness. 

Rob Beeler, founder of sell-side consultancy service Beeler.Tech, noted how many publishers are working out how to protect themselves, and that if any SaaS-like offering from traditional SSPs could offset the risk of trading with risky buy-side partners, it could receive a fair hearing.

“There is some animosity right now [among publishers] and the way the MediaMath stuff has been handled,” he added, “there’s plenty of people out there wanting to know what the play is.”

Fellow industry consultant Lulu Phongmany told Digiday that many publishers claim they want “seats” on supply-side ad tech, such as an ad exchange or SSP, as it gives them a more direct connection to advertisers (and theoretically) means they are subject to a lesser “ad tech tax.”

Phongmany compared it to “the difference between buying at wholesale or buying at retail,” but also observed that not many will have the expertise to make the most of a SaaS-like offering from SSPs. 

“Historically, you have had to transact at huge volumes to make a seat worth while,” she told Digiday, adding that any publisher that is pitched such an offering needs to ask exactly what they are going to get in return.

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