The SSP Conundrum

April 19, 2016
by James Shears – GM of Advanced TV

As a relative newbie to the programmatic space, I can speak from experience that the steepest learning curve was around all the acronyms.  One that should be fairly easy to comprehend is the Supply Side Platform or SSP.  Surprisingly though, in the TV landscape today, the term seems quite convoluted.  At the risk of being unfairly general, there are a lot of companies trying to solve problems that either don’t exist or are maintaining status quo of the TV industry.

In the traditional sense, TV has long operated its own yield management business by packaging impressions at the daypart and show level.  I spent many years at the beginning of my career doing just that.  Sellers worked to perfect a daypart mix that maximized yield by moving less desirable dayparts or programs while prolonging their hold of the premium inventory.  Because there was limited supply, and limited data, the buy side lacked the tools to decision on an appropriate TV mix.

In a world of data, that is no longer the case.  In fact, the pendulum of power is swinging back to the buyer.  Partly aided by choice and fragmentation, data is making the ad industry in general more accountable.  The thought is that reality has bypassed TV but that just isn’t the case.  Today, there are many options around attribution and data when looking at addressable inventory (whether that be through connected or linear TV).  Even outside of addressable, modelling can allow a buyer to understand viewership behaviors of those within an intended target.  All this is to say, we’re outside of the traditional.

As the medium becomes more fragmented than it was even last year, the networks, MVPDs and other content providers are in a time of transition.  There can be no argument that the migration from traditional terrestrial linear television is underway.  It would be a mistake, however, to think that inevitable transition will happen overnight or even next year.  There are still roughly 100 million homes that subscribe to television and by 2018, eMarketer predicts there will be a likely drop to 97.8 million homes; that’s still about 78% of the population.  None of that is to say that connected devices (including TV) won’t eventually be the norm, but until we get there, we need to understand fragmentation of TV content will continue to proliferate.

Which brings us back to the tech on the supply side.  The easiest benefit for sellers to grasp early on was that of automation.  Taking a deeper dive though, is that an actual benefit?  There are some pockets of TV (i.e. broad national cable) where it is already a fairly efficient model; adding automation is just another layer.  The local side is different where inefficiencies exist but it is a disservice to say that automation is one size fits all.

Sellers need to be incentivized to sell inventory programmatically.  If it’s not automation, why enter the space in the first place?  Sure, you could argue that new digital dollars will flow to TV but it won’t cover everything TV makes today.  It’s about yield.  More than that, it is about forecasting coupled with yield management.  That may seem simplistic but it’s less about the usual allocation of spots and more about best fit algorithms leveraging audience data to find the advertiser that optimizes the business for the seller.  Again, breaking the mold of what was previously accepted.

The good news around an approach like this is that as everyone talks about the importance of transparency, this gets us there quicker.  It’s less about an ad network model aggregating inventory and creating an “automated” platform and more about managing a business that has become increasingly complex.  At the end of the day, if goals of buyers and sellers are aligned, we should be able to move consumers down the marketing funnel which should be the ultimate goal.

All of this is not to say there is not value in what has been done previously to try and wake a sleeping giant but rather recognize opportunities to grow this nascent space even further.

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