As the real-time ad sales market continues its evolution, many technology players have built platforms and tools that are designed to offer market participants open access to the vast pools of demand and ad inventory that exist across the entire ad sales ecosystem. This approach views the real-time ad sales market as essentially one market. The companies that subscribe to this approach want to provide buyers and publishers with a complete and unbiased view into a fast growing and dynamic market where they can interact with one another with as little friction as possible.
Yet there are other platforms and media owners in the programmatic space that have adopted a less open approach. They have built their technology around the premise of a closed ecosystem. In this model, buyers and sellers interact in a closed environment. Much like life inside an exclusive gated community, everything is seamless and pleasant—as long as you are living inside the community. However, imagine if you were encouraged never to leave this gated community. Sure, the golf course, shopping mall and spa are great, but there’s also a whole world outside the community that you should visit and keep tabs on.
In some cases, a closed platform can bias buyers towards the ad inventory of media properties owed by that platform. In other cases, the closed technology is designed as part of an effort to create a sort of “uber exchange” that generates friction with buyers and sellers operating outside the platform. Here the goal seems to be to nudge those players operating outside the ecosystem into the closed environment in hopes of building market share.
Beyond the fact that closed environments only seem to benefit the entity that owns and controls that environment, there are clear reasons why an open ecosystem make sense for both publishers and buyers. As programmatic buying continues to skyrocket in popularity, more buyers and more ad inventory are added to the market daily. Magna Global estimates that global programmatic buying reached $21 billion in 2014 climbing by 52%, with no significant slowdown in sight. Indeed as new players join the market, we are seeing more complexity overall and a general fragmentation of buying. Integrating these new demand and supply sources is easier for everyone in an open environment.
We speak to publishers every day and they ask us for recommendations on whom they should work with, often touching on the perceived benefits of closed ecosystems. Our view is that demand is hyper-fragmented and becoming more so. Discounting part of the buyer ecosystem by working with a subset of its players limits your opportunity to maximize the value of your inventory.
Buyers and sellers should ask their technology partners what their stance is on open environments vs. closed environments. Do they offer demand and supply from across the entire market or are they building a (closed) network that creates friction when a buyer or publisher wants to transact with a party outside the ecosystem?
PubMatic is dedicated to offering our publishers demand from any and all sources across the ad sales market. We have also designed our platform so that buyers can transact in whichever way they feel best suits their needs; whether Open RTB, Private Marketplace or Automated Guaranteed, and across desktop, mobile, video and native, as programmatic continues its assault on traditional advertising. Not only are we dedicated to the open ecosystem ideal – PubMatic was founded on it. That is because we believe that an open ecosystem benefits both buyers and publishers. You know, the people the technology is supposed to be helping in the first place.