The Evolution of SSPs: From Ad Servers to Programmatic Powerhouses
A supply-side platform (SSP) is a key part of the real-time bidding process within programmatic advertising. It plays a crucial role in helping publishers efficiently sell their advertising inventory, maximize revenue, and retain control over their digital advertising strategy.
In this article, we invite you to explore how the SSP has evolved. We will analyze each of the phases, from ad servers to programmatic powerhouses.
Phase 1: Creation
The SSP concept evolved gradually with the growth of online advertising and programmatic advertising technology. We can trace the development of SSPs back to the mid-2000s when the online advertising industry started shifting towards RTB and programmatic advertising. Ad exchanges and ad networks played a significant role in this evolution, and SSPs emerged as tools to help publishers participate in the RTB ecosystem and optimize their ad revenue.
SSPs became prominent components of the digital advertising ecosystem in the mid-2000s and have continued to evolve ever since.
Phase 2: Introduction of Ad Servers
Ad Servers emerged as centralized platforms responsible for storing and organizing a diverse array of digital advertisements, including display banners, video ads, native ads, and more.
Ad Servers revolutionized ad delivery by ensuring ads reached their designated ad slots on websites and mobile apps. They provided tracking and reporting capabilities, offering insights into ad performance, such as impressions, clicks, and conversions.
SSPs and Ad Servers are integral components of the digital advertising ecosystem nowadays. They work together to facilitate the efficient delivery and optimization of ads.
Phase 3: Ad Network Mediation
Before the advent of real-time bidding, content consumption primarily occurred on desktop devices. At that time, traditional tag-based guaranteed sales represented a lucrative revenue stream for publishers. Publishers would often allocate their surplus impressions to whichever ad network offered the highest CPM.
In a subsequent phase, publishers began optimizing their residual income by collaborating with multiple ad networks simultaneously. This allowed them to forgo the laborious task of manually fine-tuning the performance of each network, as SSPs took on this responsibility.
In the early stages, even though SSPs had automated pricing algorithms in place, they maintained dedicated yield management teams. These teams manually adjusted various network tags based on historical performance, with a focus on individual publishers. This marked the original SSP model.
Phase 4: The Rise Of RTB
The founding of several leading Demand-Side Platforms in 2007 marked a significant milestone for the development of Supply-Side Platforms. DSPs connected advertisers, agencies, and marketers with SSPs, acting as the bridge between the demand side and the supply side of the advertising ecosystem.
Prior to 2009, the advertising landscape featured platforms with opaque business models, offering limited access to sources of inventory, primarily through site lists. In 2009, major SSPs began supporting Real-Time Bidding (RTB), which allowed buyers to purchase ad inventory on an individual impression level, significantly improving efficiency and campaign performance across multiple exchanges.
RTB became the preferred method for purchasing remnant inventory, enabling DSPs, ad networks, agency trading desks, and other intermediaries to leverage data in unprecedented ways.
Phase 5: Private Marketplaces And Programmatic Direct
SSPs evolved into more transparent, exchange-based business models to capitalize on the growing popularity of RTB as buyers embraced this form of transaction. Within a few years, RTB-based revenue constituted a significant portion of SSP-managed revenue, leading publishers to adopt advanced features for optimizing their RTB-based strategies.
Private marketplaces also emerged as a pricing strategy, allowing publishers to offer select buyers exclusive buying conditions using RTB-surfaced data. During this period the deal ID technology was introduced, enabling publishers to offer specific buyers first-party data, private inventory, preferred pricing, or a combination of these at agreed-upon rates. Private marketplaces gained prominence among buyers and sellers, leading publishers to add programmatic line items to their proposals. The emergence of automated guaranteed software allowed publishers to manage and sell their inventory programmatically across all tiers, from direct to remnant.
Conclusion
The journey of SSPs from their inception to their current role as programmatic powerhouses is a testament to the ever-evolving landscape of digital advertising. SSPs have grown into sophisticated systems that facilitate real-time bidding, yield optimization, and advanced targeting.
GothamAds is a SSP that helps companies maximize their revenue, connect with diverse demand sources, and offer precise targeting options. We facilitate the dynamic and data-rich advertising ecosystem.
In the future, we can expect SSPs to continue evolving, embracing emerging technologies, and adapting to the ever-changing demands of the digital advertising industry. And, of course, our company will also be following all innovations in the programmatic world.
