Auction Reselling Benefits Everyone but You
This conversation originally took place within the Beeler.Tech Publisher Community. We often discuss Ads.txt best practices and this topic follows a very insightful Jounce Report on Path Level Audits
Hot Takes
These are my hot takes as to reselling is still prolific and why publisher’s can ditch most of it:
The DSPs still idolize scale and QPS inflation offers the illusion of scale. Outwardly, they say less is more. Behind the scenes I believe they are still gluttons for QPS and would rather filter requests on their side than have a realistic picture of supply. This is a legacy problem that has ballooned out of control. DSP design is pretty old and they can't just unplug from the matrix, build a new paradigm, and win/hit goals. Once you unplug, there's no more imaginary steak dinners. They see the landscape for what it actually is and they may not like what they see - finite supply.
SSPs finished conquesting the display and video landscape years ago. There are very limited ways they can grow their businesses beyond taking share of voice from their competitors. They win more by supporting more supply paths. More paths, attract more bids, which translates to growth for the exchange. It does not make publishers more money. It makes the exchanges more money.
Everyone thinks about buyers all the time. Publishers should too. Efficiency should drive better outcomes for campaigns. 10% makes a huge performance difference at the scale of a DSP. If everyone pulled the plug on low value reselling, DSPs would see the performance impact on their ROAS.
I have always thought about resellers as detractors to my most important accounts. My direct relationships are most valuable. Every reseller line that wins shrinks the size of my direct account. Then the reseller becomes that SSP’s most important customer. I've lost my relevance because I've bled out my account to resellers who carry more weight.
Some reselling does drive legitimate incremental value. But we have to ask why... Every SSP is primarily powered by 4 categories of demand:
1) DV360 demand (30-40%),
2) TTD demand (20-30%),
3) All the other DSPs (<30%).
4) SSP curated deals (most likely within the top 3-5 DSPs)
Open Market
If DV360 and TTD are half of an exchange there is no sense in adding reseller rev shares on top of those connections. Both DSPs, along with a handful of other relevant but smaller players, integrate directly with publishers. They integrate in all the major SSPs. AND, they buy through the resellers for an extra 10-20% fee?!
SSP Curation
A small, niche SSP may be legitimately selling PMPs through a reseller seat. Sales as a service can be worth paying for. But, SSP curated deals shouldn't be serving to resellers. Advertisers should be upset this is happening! It’s the antithesis to curated value. I suspect buyers don’t even realize it's happening.
Signal Enrichment
I have heard resellers have “secret sauce” like signal enrichment. I have to ask, why aren't the core SSPs optimizing their products sufficiently. One would think if there were a huge opportunity to grow the exchange they would take it? They should be able to figure out what a reseller is doing through the log level data. Everything is transparent in the bid request and they could corroborate the nuances against their own direct auctions for the same impression. Do resellers take risks that the major SSPs aren’t willing to? What does that mean for publishers?
Sales & Audience Extension
There are resellers who provide audience extension from their O&O. There are resellers who are selling PMPs. These services theoretically bring differentiated demand. Unfortunately, you have to take the whole kit can caboodle and can't just run the PMP demand. These resellers usually aren't super transparent about the deal share of voice and the responsible SSPs. That is because they are far more profitable and stable reselling the open market than just PMPs. Once again, the reselling doesn’t benefit the publisher, it props up profit margins for the reseller. Maybe in the case of PMP sales, curation, and audience extensions we accept the trade off because selling is hard?
The Publisher Dilemma
You can't split test ads.txt lines. Most resellers don't share how much demand comes through their SSP vs their reseller lines. You can remove the reseller lines and see what happens top line. You can also split test the bidder off.
Whether “rebroadcasting” (Chris Kane’s term to describe most open market reselling) adds value really depends on how strong a site performs for the core DSPs and AdWords. If supply is weak then reselling is necessary to attract demand. That's a whole other kettle of fish conversation that ends with, eliminate low value inventory and bolster demand density and CPM.