Place Exchange’s POV on The Trade Desk’s New Bidding Practices
October 25, 2023 By Robert Loftus
Over the past few weeks, I’ve been approached by numerous partners asking for commentary on a recent article about The Trade Desk’s (TTD) bidding practices. The article spoke about TTD’s new approach of transmitting bids below media owner floor prices and its potential negative effects on SSPs. Our partners were concerned, asking “how does Place Exchange feel about this?” and “will this affect your connection with TTD?”
As the only independent, unbiased OOH SSP, the answer was simple: Place Exchange is built on trust and transparency, which means not only are we not worried about this development, we’re actually encouraged by and supportive of the approach that TTD is taking. TTD’s new practice is only detrimental to SSPs who either (1) engage in non-transparent economics, such as hidden fees, markups, or arbitrage and/or (2) do not transparently share with their media owner partners the true price that buyers are bidding. Neither of those is true of Place Exchange. Let’s break that down…
A media buyer is quoted in the Digiday article as saying “Lowering outgoing bids is sure to disadvantage those [SSPs] who significantly mark up the costs of media” – we agree! Some SSPs non-transparently lower the bid prices received from DSPs, passing on a smaller bid to their media owners and simply pocketing the difference. Other SSPs accomplish the same thing by routing transactions through mechanisms that involve higher fees. For example, some OOH SSP’s bundle inventory into “auction packages” or marketplace deals for which the inventory is not always made visible to buyers, and which are represented as “open exchange” buys to media owners. This allows the SSP to take a higher tech fee because of tiered agreements that incentivize pushing everything via the open exchange. TTD’s new approach will put more pressure on SSPs engaging in these kinds of tactics.
What about the impact on media owners? A TTD representative was quoted in the Digiday article as saying “If anything, [this change is] largely beneficial to publishers, because now they’re getting data points for pricing information that they never would have had otherwise,” – once again, we agree! SSPs who engage in the kinds of arbitrage and markups described above have no incentive to reveal to their media owners the true bids coming from buyers, which in turn prevents those media owners from gaining access to information that could help them make better yield decisions. Only a platform committed to full transparency can help media owners take advantage of that opportunity.
At Place Exchange, transparency is at the foundation of what we do. We give media owners full insight into the actual buyer bid submitted for every transaction, and disclose all the economics through to the amount the media owner receives, with nothing hidden along the way, ever. Our media owners have full control over pricing and auction settings for all transactions and can share pricing guidance with buyers in the form of “planning rates” that may be different from their price floors. Through our reporting suite, media owners have full visibility into auction-level data including all buyers participating in the auction and the actual bid price of each participating bid (whether above or below the floor). Our self-service dashboard shows this granularity in real-time to media owners, for all transaction types including open auction and private marketplace deals. We believe this should be standard practice for any SSP whose primary objective is driving media owner monetization.
When it comes down to it, we feel that Place Exchange’s platform, built on transparency, is well-suited for the innovations we’re seeing from buyers aimed at bringing more transparency and efficiency to the supply chain, and we believe that moving forward, we are well positioned to continue to champion programmatic OOH and the best interests of our publishers.