A correction has been made in this story. See below for details.
More and more agencies and marketers are turning to so-called demand-side platforms, or DSPs, for real-time audience buying. It's a nascent market dominated by venture-funded startups, holding company technologies, and Google, which bought Invite Media in 2010 for $70 million.But Forrester Research is attempting to shed some light on this market with a new report released today.
Since most DSPs are privately held, their operations are opaque; even the definition of a DSP is a moving target with some companies offering audience-buying capabilities in addition to other services. AppNexus, for example, is widely viewed as an ad exchange, but one which Forrester said is building out its buy-side capabilities. Google's Invite Media didn't provide information to Forrester, which relied on public information and interviews with DSP customers.
Senior analyst Joanna O' Connell evaluated seven companies that are widely viewed as DSPs or possess DSP-like capabilities on 48 different criteria including media access and support; data access and support; algorithmic optimization; leadership; and internal resources. Forrester obtained this information through product demos, interviews with clients, client surveys, and interviews with the DSPs themselves.
MediaMath, Turn and Dataxu were termed "clear leaders" based on their current offerings and strategy. DataXu received the top mark for its current offering, but factoring in leadership and internal resources as Forrester does in its overall ranking, MediaMath, Turn, and DataXu finish No. 1, 2, 3, respectively." Understandably, DataXu is giving away the report here.
DataXu CEO Mike Baker said its strength can be traced to its newer-to-the-market standing in the industry. "When some of these other companies launched, there was really no real-time bidding yet," Mr. Baker said. "But DataXu, from the ground up, was built to make decisions in real time."
Forrester commended MediaMath's "excellent algorithmic optimization capabilities" and noted that "its multichannel media and data access is both broad and deep."
But top-ranked doesn't mean largest. Based on Forrester's estimate of monthly impression volume, AppNexus has a bigger footprint. Here's Forrester's scale ranking, noting that some figures are more vague than others.
- AppNexus: 26 billion monthly impressions
- Invite Media (Google): 10 billion-plus
- MediaMath: 10 billion-plus
- Turn: 10 billion-plus
- Dataxu: 3 billion
- LucidMedia Networks: 2.5 billion
- X+1: 2 billion
On revenue, the rankings shift again. All the DSPs except Google's Invite Media reported revenue to Forrester, which assigned a ranking from 1 to 5.
- MediaMath: 5
- Turn: 5
- X+1: 5
- Dataxu: 4
- LucidMedia: 3
- AppNexus: 2
Vague stuff, but a start in sorting out the market. "That Forrester has even embarked on this shows how DSP technology has become a must-have for next-generation agencies and brands," MediaMath CEO Joe Zawadzki wrote in an email.
The breadth of criteria evaluated in the report points to the continued race among DSPs to add on more technologies in an effort to differentiate themselves in the marketplace and create a more complete technology stack, either through acquisitions or in-house product development.
"One of the things we'll likely continue to see, and are already seeing in the cases of Media Math and Turn, is that they're getting large enough that they are augmenting their capabilities," said Terence Kawaja, of LUMA Partners. "They're all trying to solve the problems of the advertiser in any way they can."
~ ~ ~
CORRECTION: An earlier version of this story singled out Dataxu as the top-ranked DSP, citing a new Forrester report. Forrester, in fact, singled out three DSPs as top-ranked, including Dataxu, MediaMath and Turn. DataXu received the top mark for its "current offering." The overall ranking is a 50-50 weighting of both "current offering" and "strategy." Forrester's overall ranking positions MediaMath, Turn, and DataXu as Nos. 1, 2 and 3, respectively.