There are no new DSPs out there. Nobody’s investing in the category. Google, Amazon and The Trade Desk won, and there’s no point trying to become another omnichannel DSP for everything.
That isn’t true, mind you.
What is true is that the only way to win now as a DSP is seemingly to forsake the idea of being an omnichannel DSP.
There used to be many specialist DSPs, mostly tied to a particular channel or format – like mobile, video or advanced video. Those consolidated to omnichannel solutions, while the ones that remained focused on one category withered.
Now, there are fast-growing and interesting green shoots popping up among new specialist DSPs, which see their niches – including health care, out-of-home (OOH) media and location, local and SMB businesses, political advertising and B2B – as viable for their own growth. Plus, they’re insulated from the omnichannel giants.
AdExchanger took a look at a business from each category. The DSPs are worth examination in their own rights, but also as examples of how startups find ways through (or around) incumbents.
Politics
Specialist DSPs have intrinsic features that don’t make sense for omnichannel DSPs.
For IQM, a political DSP that had its first presidential cycle in 2016, one of those features is its voter file-based identity graph, said SVP Matthew Dybwad, former head of political ad sales at Adobe and Microsoft.
And while all DSPs have data partnerships and inventory development teams, they aren’t native to politics. For instance, IQM pulls data from the census and state voter files, which are public and updated regularly by many states.
Political advertisers also have particular location data needs.
“Every DSP has geotargeting,” Dybwad said, but not by political district. IQM breaks down where actual voting happens, though.
It has finer controls, he said, that create geo-fenced polygons to target people by district.
Targeting people while they’re waiting to vote or using poll locations to avoid placing ads, for instance, since states have laws about advertising within a vicinity of poll locations.
Politics is also a risky market for Google and Meta. The PR headaches aren’t worth the revenue from political advertising for either. Both platforms have reduced voter targeting capabilities and continuously changed political ad rules right up until October 2020.
The big platforms are “skittish” of political advertising, and political advertisers are wary of being burnt (again), Dybwad said. The vertical needs DSPs that aren’t wrapped up in partisan politics and liable to abandon political advertising altogether, when things heat up.
OOH media
OOH media has been locked out of much of the growth in data-driven advertising because there’s little data available for targeting and attribution.
Omnichannel DSPs like TTD and Verizon have made splashy entrances into OOH, but they’re bound by what inventory can be acquired in true programmatic fashion: real-time and biddable. That means OOH screens.
But the vast majority of OOH media isn’t digitized.
AdQuick, an OOH DSP, bids on and buys static OOH placements – like billboards, but also splashier setups – that don’t carry log files. With the advertiser’s first-party data, mobile location data and the ability to retarget devices exposed to an OOH ad, OOH has the capability for programmatic quality lookalike modeling and attribution, said AdQuick co-founder and CEO Matthew O’Connor.
And that’s just the back-end. AdQuick is also built for OOH buyers.
Advertisers make their placements atop a mapping overlay, for instance, about where people are in the physical world, not in media. So advertisers can identify types of stores or places they want to target audiences.
Omnichannel DSPs “shoehorn” DOOH into their offerings as campaign extensions, O’Connor said. AdQuick is more about trying to make OOH as it exists – which is to say, mostly printed materials, not screens – fit into programmatic targeting and attribution methodologies.
AdQuick also educates ad buyers on connecting mobile ID exposures to app install conversions, via vendors like Branch or AppsFlyer.
“More often than not,” he said, “when we talk to new advertisers in space, they have no idea that any of this is possible.”
The SMBs
Simpli.fi, founded in 2010 and with 600 employees, isn’t exactly a niche operation.
However, it is highly focused, on the longtail of regional agencies and small- or mid-size businesses that often have localized advertising needs, said CEO Frost Prioleau.
Simpli.fi’s secret SMB sauce comes from its “unstructured data,” according to Prioleau, which is similar to custom bidding but applied for local advertising.
A Toyota car dealer network, for instance, might have very different targeting needs in California, where it over-indexes on electric vehicles, rather than Texas, where it’s moving Toyota Tundra pickups.
Rather than bidding as one brand, Prioleau said any sort of SMB chain or franchise can use Simpli.fi’s unstructured data to create keywords and contextual information most important by location.
As with many specialist DSPs, Simpli.fi is also flexible about media and monetization. Smaller regional agencies and advertisers may want more managed services to cover search and social, not just programmatic, he said. And Simpli.fi will oblige.
Also, of course, Simpli.fi drops the campaign minimums, whereas a platform like Google or TTD may not take a thousand dollar campaign – or might need to see thousands of dollars to even begin optimizing campaigns.
The omnichannel platforms are consolidating campaigns, so they have fewer larger budgets to optimize. Prioleau said Simpli.fi focuses on advertisers that are more likely to be running many campaigns at relatively small budgets.
“It’s a different kind of automation and workflow to be built in,” he said.
B2B
Business marketers were relatively quick to embrace programmatic targeting. But instead of focusing on the individual, B2B marketers target certain job titles and employment types – the firms that buy B2B software, and the people at those firms who make the call. This is called account-based marketing.
But a B2B DSP still has great points of differentiation, according to Chris Golec, co-founder of Demandbase, a B2B DSP market leader, who also founded another B2B ad tech biz last year called Channel99.
One thing that Channel99 borrows from omnichannel DSPs is the idea of pixeling everything. But instead of focusing on sites and programmatic ads, Golec said the B2B DSP pixels touchpoints such as mail signatures and syndicated marketing content, like white papers or research reports. Those are the key touchpoints for a B2B campaign, rather than store sales, app downloads or video views.
Programmatic display campaigns have great scale for B2B marketers – an ocean of tens of millions of impressions, rather than the mere thousands coming from automated email marketing. Channel99 sees when display ads are effectively driving value in tandem with the email campaigns, which aren’t programmatic and therefore wouldn’t be part of a TTD campaign.
With the B2B pixel and measurement focus, Golec said platforms like LinkedIn and other media valuable to B2B advertisers start to pop out within campaigns that previously only shined an attribution light on search and social.
Golec said all DSPs claim to have a solution that mitigates the loss of third-party cookies and user-level tracking. But DSPs that aren’t anchored by massive walled garden data sets could see their effectiveness plummet. Channel99 and other B2B DSPs focus on employers and employment types.
“It’ll be great for us” when third-party cookies are gone, he said. “But I guess I’ve been saying that for 10 years or so.”
Health Care
The health care vertical is another that cries out for specialization.
For one thing, there are particular laws, regulations and a set of marketers who aren’t trying to push the envelope. In fact, they are often extremely conservative about trying new things or touching user-level data.
DeepIntent, a health care and pharma DSP, doesn’t even work with many consumer health care brands. It’s focused on targeting health care providers – doctors or professionals in health care or pharma – and targeting patients for prescription meds. An over-the-counter drug like Advil, for instance, isn’t a fit.
When it was founded in 2016, DeepIntent only targeted doctors and health care workers. But over the past three years, since launching its patient targeting, that part of the business has grown to a narrow majority of revenue, according to founder and CEO Chris Paquette.
In the future, there’s a third potential business line working with agencies and advertisers to hone their health care campaigns within walled gardens like Meta, though currently DeepIntent only buys in open programmatic channels.
Paquette said DeepIntent can go further into channels and develop new data products, like recent CTV integrations with Roku, Univision and LG, as pharma brands level up their own programmatic chops and acclimate to targeting TV ads.
Even a few years ago, he said, DeepIntent’s new hires were coming from pharma and health care companies. Nowadays, more often they come from programmatic vendors like OpenX or MediaMath.
“The two worlds are colliding,” he said.
And that means more sophisticated pharma marketers are pressing for programmatic-style attribution. But instead of sales or downloads, he said, they want campaigns attributable to the number of scripts written. And for them, “reach” pertains to health care providers and clinics with relevant patient populations.
“That’s just part of our dashboard and planning software,” he said.
