In advert tech, labels aren’t simply beauty. They outline how the market sees itself. The Commerce Desk’s newest flip reveals simply how a lot weight a reputation can carry.
For years, SSPs have been solid because the vital pipes carrying writer stock into demand platforms. Now, The Commerce Desk has determined these pipes are simply resellers — middlemen shifting advert stock at arm’s size relatively than direct conduits between consumers and sellers.
Earlier this month, it made that reclassification official.
On the floor, it appears like semantics. However to SSPs — and the publishers counting on them — the reclassification comes with actual penalties: much less cash and even much less leverage.
The cash half is easy. Kokai, The Commerce Desk’s AI-powered platform, penalizes resold stock and pushes towards what it calls “clear” provide paths. The leverage half is extra existential. SSPs, already preventing for relevance, lose affect as consumers are pushed to undergo The Commerce Desk’s most well-liked integrations.
“The Commerce Desk is constructing sell-side performance into its platform step-by-step and this newest transfer is already hitting the SSPs we work with,” stated an advert exec who exchanged anonymity for candor.
By itself, this doesn’t make The Commerce Desk a villain. Fewer middlemen means fewer methods — from bid duplication to ground manipulation — that may drain cash from consumers. The problem is the way it’s executed. The Commerce Desk isn’t simply reducing out inefficiencies — it’s utilizing its place to tighten management over the stream of advert {dollars}.
Right here’s how that may — and sometimes does — play out:
Take a writer with stock accessible via each an SSP and The Commerce Desk’s most well-liked paths — OpenPath, its proprietary direct hyperlink to publishers, or SP500, a curated set of 500 “environment friendly” provide routes throughout the open alternate.
Earlier than Kokai, the place {dollars} landed typically trusted purchaser offers or most well-liked setups. Now, with SSPs tagged as resellers, these paths are scored as much less environment friendly and lose out. As an alternative, Kokai steers extra of the cash towards OpenPath or SP500.
The Commerce Desk frames this as a win-win: consumers get cleaner provide, sellers preserve extra web income. However The Commerce Desk additionally wins, increasing its lower via OpenPath’s writer price and the monetization layers Kokai tacks on to SP500 buys, from bid shading to id, measurement and third-party activations.
That’s the half that makes some firms uneasy.
“We’re seeing as much as 50% discount in writer payouts via The Commerce Desk since they began directing extra spend via their very own instrument during the last quarter and a bit,” stated an advert exec, who spoke on situation of anonymity over considerations they’d jeopardize the connection.
The hit hasn’t been as extreme for these with direct hyperlinks to The Commerce Desk’s {dollars}. Publishers and distributors plugged into its personal provide routes — notably OpenPath — are seeing extra spend stream their means consequently.
“We’re seeing a marked improve in OpenPath spending,” stated a writer consultant, who spoke to Digiday on situation of anonymity and didn’t present precise figures.
These with out that entry are left asking laborious questions.
“To be trustworthy, we don’t have an OpenPath integration for me to check this, nevertheless, this may increasingly push us to get that path arrange,” stated the digital director of a writer in North America, who spoke to Digiday on situation of anonymity.
Irritating as that is for publishers and SSPs alike, it’s value remembering the corporate isn’t appearing out of malice a lot as self-interest channeled via its purchasers. They’ve all the time been its north star, and in Kokai it’s discovered a solution to translate their impatience with a market affected by methods and tolls right into a system that doubles as leverage. Redefining who qualifies as a reseller feeds straight into that technique.
“We’re not in opposition to folks making margin however we see a whole lot of loopy margin extraction within the market that may be upwards of 60%,” stated Will Doherty, svp of stock improvement at The Commerce Desk. ”We are able to’t absolutely rationalize that. Dynamic take charges, duplication, even ID bridging — these points all create sub optimum variations and paths. When you will have one path that’s at a set price and doesn’t do any of these issues, it can typically distinction favorably.”
All of this could be simpler for critics to swallow if entrepreneurs might merely decide out and purchase what they need, from whomever they need. They’ll’t. Exercising that management means digging via Kokai’s settings, or, extra typically, getting on the cellphone with a rep from The Commerce Desk. In equity, a few of that is indicative of a platform nonetheless rolling out — quirks to repair, knobs for purchasers to study. Even so, the friction makes clear the place the leverage lies.
“They’ve [The Trade Desk] redefined an industry-wide time period in order to nudge consumers into spending extra on their very own merchandise,” stated an advert exec who spoke on situation of anonymity in order to not jeopardize industrial offers with advert tech agency.
For advert execs like this, the transfer is triggering as a result of it appears like deja vu. The Commerce Desk as soon as solid itself because the antidote to platform dominance. Now, they see it operating the identical playbook: a decade in the past, publishers needed to promote on Google’s phrases or danger dropping their largest purchaser; in the present day they worry The Commerce Desk is moving into that function.
It’s a priority that’s been brewing for some time.
Way back to 2022, when OpenPath launched, there have been warnings that what was framed as an effort to carry readability to a murky programmatic system might simply as simply change into a solution to push extra spend towards The Commerce Desk. These considerations have solely intensified this 12 months as extra purchasers have been moved onto Kokai, accelerating the stream of advert {dollars} away from some paths — and deeper into The Commerce Desk’s personal.
“With OpenPath there’s no duplication, no dynamic charges or third-party events which can be within the provide chain,” stated Doherty. “One of many more durable issues to cope with with some SSPs is that there’s typically a whole lot of third events within the transaction however as a result of the SSP pays them straight they’re not declared.”
