Programmatic ad power shifts as agencies and supply-side platforms work together

The balance of power in digital advertising is shifting, with the demand-side platforms that once controlled ad spending seeing the supply side gain leverage and work more closely with media buyers, according to multiple advertising leaders. This shift, gradual over the years, has accelerated recently as flaws in the old programmatic system—such as low-quality ad placements, hidden fees, complex supply chains and faulty targeting—have become more pronounced. To help remedy the situation, agencies are increasingly working with supply-side platforms such as Magnite, Index Exchange, PubMatic and others, to tap directly into the ad inventory of online publishers. Some ad experts even see it as a threat to the viability of demand-side players that have been the main conduit for sending ad budgets into digital markets for decades. There are some ad experts who think SSPs could ultimately bypass DSPs altogether by doing direct deals with holding companies, their agencies and independent agencies that provide media buying services, though that’s not a short-term concern. “What’s shifting and what’s really different in the market now is how agencies and holding companies are really seeking partnerships that are closer with the SSPs than ever before,” said Jessica Breslav, chief customer officer at Index Exchange. “The conversations that I’m having with agencies [are] really about how we shift some of that influence on the sell side, and it can mean a lot of different things.” Data-Driven Marketing Playbook Join us May 22 in NYC to explore how data powers marketing Learn more here Index Exchange is not looking to cut out the demand-side platforms such as The Trade Desk and Google’s Display and Video 360. “We are fierce representatives of the publisher, and we need the DSP to be fierce representatives of the buyer,” Breslav said. Still, Index Exchange’s product roadmap and more direct relationships with ad buyers are changing the face of the supply side. Last year, Index Exchange launched a product called Marketplaces, which was partly designed for agencies and other media buyers to get better results in programmatic markets—leading advertisers to higher quality inventory and more of it. The program launched with agency partners, including Omnicom Media Group UK and Dentsu. “We have created the ability for agencies to leverage Index’s technology to really drive closer connections to the publishers,” Breslav said. Index’s Marketplaces was just one of many that have come to market from supply-side platforms looking for greater relations with the agency world. In 2023, PubMatic launched Activate, a platform meant to give media buyers a simpler path to supply—or, as it’s commonly known in the industry, “supply path optimization.” Also in 2023, Magnite launched ClearLine, a direct way for agencies to buy ad inventory, especially into connected TV. ClearLine was announced with GroupM and MiQ as two top agency partners. Read Ad Age’s ad tech predictions for 2025 The fruits of these developments are starting to pay off, according to ad tech leaders. Also, the need for better supply-side relations has never been greater for the agencies and the brands they represent. In recent years, the problem of “made for advertising” websites became clearer in the digital ad ecosystem. The Association of National Advertisers, the industry trade group, has led a campaign against MFAs, where programmatic ads were found to populate spammy websites. Even worse, earlier this year, industry watchdog Adalytics uncovered programmatic ads landing on sites that included child sexual abuse material. Those failures of the programmatic ad markets did not necessarily fall only on demand-side platforms, and SSPs have been implicated, as well, but the problems showed that advertisers needed better solutions for a safer digital ad market. One way to improve the ad inventory was for agencies to have closer ties to the supply side to know exactly what they are buying, according to ad leaders. Still, that’s not the only reason SSPs are “flexing” their muscles in ad tech markets, according to ad leaders. There is an overall shift in the dynamics of programmatic advertising. Yes, the advertisers want stricter “curation” of the ad space they buy so that they only get offered quality sites, but they also need scale, meaning large audiences. There also have been changes to the data landscape, where the supply side has better insights into the consumers and content on their websites and connected TV apps. The data dynamics have shifted in programmatic since the loss of data signals that used to power demand-side platforms, such as third-party cookies and other ad trackers. Platforms such as Apple and Google are restricting access to signals that used to make it simple to target internet ads through DSPs. Now, agencies are going directly to supply-side platforms to make data connections, curate higher quality inventory and negotiate deals. The closer to the supply the advertiser gets, sometimes they also get better deals, said Sara Lemmermen, VP of investment solutions at media agency Kelly Scott Madison. “What we’re seeing with deal creation is that putting together those deals directly in the SSP versus the DSP is providing smoother operations for us,” Lemmermen told Ad Age. “Overall, we’re getting greater match rates for our audience targeting that we’re setting up directly within the SSP, which again, it just ties back to more efficiency and better performance for our clients. “The effectiveness of our media is improving by developing the partnerships directly with the SSPs,” Lemmermen added, “and being more selective and getting a greater level of transparency than we’ve ever had before.” Another factor lending a leg up to the SSPs is the rise of AI—machine learning that is making faster decisions, ad tech experts said. The decisions are made on a publishers’ website often before a programmatic auction even begins, and agencies want to be as close to that decision-making as possible. Agencies also want data deals with the SSPs to enhance the outcomes. How brands like Lenovo are applying AI to programmatic Last year, PubMatic launched Resolve AI, which analyzes impression level data on a publisher’s page, and it doesn’t rely on cookies or other forms of privacy-invasive matching to connect to the advertiser. PubMatic launched the program with WPP’s GroupM. “Agencies have come to realize that SSPs are a platform to innovate on top of,” said Kyle Dozeman, PubMatic’s chief revenue officer, Americas. “That’s obviously kicked off a tremendous amount of much-needed conversations about how we build [together.] And what are the different pieces of the infrastructure that are going to support our use cases and things like that. So that’s probably the biggest change I’ve observed between our organization and how we relate to agencies.”

Programmatic ad power shifts as agencies and supply-side platforms work together

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