Billion Dollar Baby

WPP, the advertising holding company, made the news this week when it announced that their Demand Side Platform (DSP) will hit a billion dollars in advertising revenue.  This is quite an achievement, since DSP advertising tech has only been around since 2008.  To break this barrier in less than seven years speaks volumes on where the media buying industry is going.

DSPs came of age around the basic concept that advertising impressions around publishers act similar to other inventory on the Board of Trade: demand fluctuates daily, supply is abundant, and digital banners can therefore be thought of as the pork bellies of Marketing.  Ad tech companies like Turn built the first trading desks, exchanges of publisher inventory were created, and every holding company jumped aboard the trading desk movement.  WPP invested heavily in building their tech in-house, and brokering exclusivity within the publisher community.   They indicate they will hit this billion dollar mark by year-end.

More interesting to me is how the advertising has evolved.  Video and mobile are the “premium” word in desired impact and segmentation.  Yahoo, Google and Facebook took notice, and now dominate this space away from the DSPs, in “walled gardens”, where clients can now go direct.  This will require that the holding companies respond with faster, better and cheaper solutions, linked to better and more refined inventory.   Program buying must become better linked to decision science, as ad tech automation moves to the forefront.  WPP is also rapidly locking down inventory, claiming that $600 million will be spent on upfront buying.

With any technology movement, life cycles on innovation are measured in months, not years.   The landscape will likely change rapidly.  There is strength in numbers, so WPP is taking an early lead in this media revolution.  As traditional display media wanes, I predict you will see more of this also moving into the trading desk arena.  It is a trend worth following.

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