Inside Google, Amazon and The Trade Desk’s DSP battle

The DSP rivalry is heating up among Google, Amazon and The Trade Desk, as the three companies compete aggressively for advertisers while the future of programmatic advertising is at stake. In recent months, advertisers and agencies have seen Google and Amazon ramp up incentives, including receiving credits to buy through Google, according to ad tech leaders. Meanwhile, The Trade Desk has tried to capitalize on Google’s recent stumble with Privacy Sandbox, its post-cookie ad tech platform. What’s playing out is a battle of the demand-side platform—DSPs—the buy side of internet advertising. Google has Display and Video 360; Amazon has Amazon DSP; and The Trade Desk is one of the few independent ad tech firms challenging both. “Google and Amazon want more share and are prepared to get more share in a variety of ways, including pushing a pricing war,” said one ad tech executive, who spoke on condition of anonymity because of close relationships with all three DSPs. Check out the latest Ad Age events and award programs In April and May, Google and Amazon focused on their DSPs in upfront sales presentations, which was a new tack for both companies. The messaging continued through this year’s Cannes Lions International Festival of Creativity, where Amazon highlighted its DSP in presentations with advertisers. Amazon has been on a charm offensive with ad agencies to get more action in its DSP, hoping to break out of the e-commerce box. Amazon wants brands to see its DSP as an alternative for all of their programmatic advertising, which has been a tough sell because its ad tech has typically been viewed as lagging behind its older rivals, according to ad tech leaders. Amazon also recently created a new partnership with Magnite, the supply-side platform, which in part, could help educate the market on switching to Amazon DSP. Ad Age spoke with more than 10 ad tech and agency leaders about the DSP landscape, mostly on condition of anonymity. These ad leaders described an evolving programmatic ad ecosystem and saw Google, Amazon and The Trade Desk as the three top DSPs when it comes to having a wide enough footprint to capture most of the open web ad inventory, with Yahoo also getting a mention. These DSPs are changing with the marketplace, which has become more difficult to navigate with the loss of data signals online. Privacy restrictions and data controls have altered the programmatic pecking order. Google also is about to head to court with the U.S. Department of Justice, which is trying to break up its ad tech buisness, claiming it has too much control over the buy and sell sides of the equation. Amazon, Google and The Trade Desk declined to comment for this story. Each DSP has unique attributes that give advertisers a reason to place their spend through them. For Google, there is exclusive access to YouTube inventory and unique data. For Amazon, it’s about sales and shopping data and Prime Video ads. The Trade Desk has always sold its DSP as the most advanced in terms of user interface, and it emphasizes how it controls for digital ad fraud and inefficiency in the programmatic supply chain. In recent years, The Trade Desk has made more connections with the sell side of the ecosystem—it has focused on connected TV and retail media, and it developed Unified ID 2.0, an identifier that, if adopted widely, would give it a valuable data resource for post-cookie advertising. There is plenty of money at stake: U.S. programmatic display advertising is expected to increase 16% to $157 billion in 2024, according to eMarketer, and U.S. connected TV programmatic video advertising is expected to generate $24 billion in 2024, up 23% year over year. 40 under 40 entries are open The final deadline for nominations is Aug. 2 Enter here Spotlight on ad tech Google made moves within the past year to promote DV360, including at its NewFront, where it announced deals with Paramount, Warner Bros. Discovery and NBCUniversal to open their inventory to DV360. Google also has given credits to agencies that spend more through the DSP, according to one agency leader speaking on the condition of anonymity. “Google [has] never really been one to incentivize spend,” the agency leader said. “So even getting a couple of percentage points back for credits for an advertiser, or added value like measurement studies, those are things that make a difference.” Meanwhile, Amazon has been trying to reshape the narrative around its DSP, which has been mostly viewed as a way to tap into Amazon properties with the benefits of Amazon’s shopping data. At Cannes in June, Amazon announced new ways to buy inventory through its DSP without third-party cookies. Amazon has also been building its publisher cloud so that it can sync buyers and sellers, striking a deal with Magnite, the supply-side platform, making it part of a new “certified supply exchange.” Amazon also has deals with PubMatic and Index Exchange. “Amazon is leaning into working more with third-party supply partners, with the idea that they really want to take on The Trade Desk and Google,” said a second ad tech executive, who spoke on condition of anonymity because of close relationships with Amazon. “They want to be omnichannel, they want to be thought of as your first stop for all your campaigns, right? Don’t just come to us because you want Amazon data, and you want it on some niche supply, or you just want Prime Video. Take your budgets from The Trade Desk, take your budgets out at Google, and run them through Amazon.” A recent whitepaper from Amazon’s ad team discusses how Amazon DSP is effective at “bid shading,” a tactic to shave dollars off the cost of ad impressions in auctions. Amazon noted in its paper, meant for advertisers, that its ad algorithms provide the bid shading for free through its AI capabilities. The Trade Desk leaves its mark The Trade Desk and its CEO Jeff Green have been making waves in the ad tech industry since the company launched in 2009. The Trade Desk went public in 2016 and is now valued at close to $45 billion. For a sense of scale: The Trade Desk generated $1.9 billion in revenue in 2023. Google’s ads business, which includes its own properties such as Search and YouTube, generated $65.5 billion in revenue in 2023. Amazon’s ad revenue reached $47 billion in 2023. The Trade Desk has been an irritant to Google, especially in the past year. Green has blasted Google’s proposal to deprecate third-party cookies and stand-up Privacy Sandbox, the ad platform that is supposed to rewire the way DSPs buy programmatic ads through Chrome web browsers, which Google also owns. Last month, Google was forced to alter its ambitious proposal, by saying it would give users the option to deactivate third-party cookies instead of forcing the change. “I have been saying for years now to the advertising industry, to Google, and even to Wall Street that I think it is a strategic mistake for Google to get rid of third-party cookies,” Green wrote on LinkedIn. The victory lap did not go unnoticed. In fact, Viant CEO Tim Vanderhook responded on LinkedIn: “The Trade Desk didn’t call Google’s reversal on deleting 3rd party cookie. They manufactured the outcome.” Vanderhook’s clapback at The Trade Desk illustrates that the DSP battle is growing, but is also an SSP battle. The Trade Desk has been changing strategies in recent years to account for signal loss on the open web. The Trade Desk developed UID2, and it built bridges with publishers and media owners to tap more directly into their ad supply. In 2022, The Trade Desk launched OpenPath to “reduce hops in the supply chain,” meaning it would get closer to publishers minimizing the number of steps ads take from DSP to their destination. Also, this summer, The Trade Desk created a list of its top 500 sellers and publishers, creating ways for advertisers to reach a more curated selection of publishers. These moves have sometimes put The Trade Desk at odds with agencies, ad tech vendors and publishers that want it to stay out of the supply side, according to ad leaders. “The Trade Desk really touts its ‘clean’ marketplace,” said an ad tech executive from a supply-side platform, speaking on condition of anonymity. “They have put a lot of pressure on the supply side to deduplicate inventory, to only send them the best path to supply. They're trying to cut out ‘hops,’ they want to get direct. They want to reduce any possibility of instance of fraud. The Trade Desk has taken a lot of steps in that area.” “They tell you they don’t want to build an SSP, but they are going direct to publishers,” the SSP executive said.

Inside Google, Amazon and The Trade Desk’s DSP battle

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