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Yahoo is letting advertisers buy publisher inventory directly from its demand-side platform via a new product called Backstage, the tech company’s answer to the industry movement toward supply-path optimization, Yahoo executives exclusively shared with Adweek.
Advertisers using Backstage, which will be available in the third quarter, will not need a supply-side platform to access publisher inventory, the traditional buying route for the programmatic supply chain.
At launch, Backstage includes over 100 publishers, including A+E Networks, Dotdash Meredith, Raptive, The Arena Group, Vizio and Newsweek, and Yahoo’s owned and operated media properties.
“This is something [clients] have asked for and now we’re delivering it,” said CRO Elizabeth Herbst-Brady, later adding, “The goal of enabling this product is in service of the advertiser.”
Yahoo’s embrace of the sell-side is a pivot after the publisher closed its SSP in February to focus on its demand-side platform earlier this year, laying off more than 50% of its ad-tech staff in the process. At the time, CEO Jim Lanzone told Adweek that Yahoo didn’t want “spread our resources too thinly across every part of the stack.”
As buyers ask for shorter supply paths, passing fewer ad-tech firms along the way, tech vendors are fighting to prove their relevance and prevent disintermediation, often by cozying up with previously untapped sides of the market. Last year, The Trade Desk launched OpenPath, which like Backstage, gives buyers a direct route to inventory without an SSP. In the past few months, both PubMatic and Magnite launched tech that lets advertisers buy premium video inventory without a DSP.
More quality, less tech
Yahoo may be pivoting back toward the sell side, but it’s not recreating its SSP. Most of the SSP tech has been deprecated, save for some features that are useful for Backstage, like the Deal ID creation tool and the Pre-Bid Adaptor. Yahoo will not provide yield optimization for publishers, and critically, only buyers using Yahoo’s DSP will have access to this inventory and not the entirety of the programmatic buying universe.
Also unlike most SSPs, Yahoo Backstage will be offering an intentionally limited selection of inventory.
“This is a rare product launch that on Day one is at the level of the scale,” Yahoo aims to stay at, said Adam Roodman, svp of ads products and strategy at Yahoo Advertising. “There’s not aspiration to make it as big as possible. We want to focus on what inventory our buyers have been asking for.”
At launch, private marketplace deals will be available with single or multiple publishers.
Through Backstage, Yahoo can benefit from its sell-side relationships more efficiently, without the costs and uncertainties of running an SSP business.
“It’s a different business model,” said Ari Paparo, CEO of Marketecture Media. “It’s much less tech and much less responsibility.”
Lifting all boats?
Theoretically, programs like Backstage and OpenPath benefit both publishers and buyers. By removing the SSP fee from the equation, the publisher makes more money and the advertisers’ ad dollars are spent more efficiently.
Yahoo says buyers are not charged an additional fee to use Backstage inventory, and publishers are still free to set their own prices.
Don Marti, vp of ecosystem innovation at publisher network Raptive, said that programs like OpenPath, which give publishers direct access to buyers, show promise.
“Publishers need to be able to capture more of the value for the content they create,” he said.
Ad-tech firms like Yahoo have been careful to frame the new connections they’re providing as helping the market, and not bumping against new competitors. But some in the industry are skeptical of the waning distinction between SSPs and DSPs.
Index Exchange’s CEO Andrew Casale wrote an open letter addressed to SSPs in April reaffirming the SSP’s commitment on the sell side. In an interview on Marketecture TV last week, CEO of DSP Viant Tim Vanderhook said he thought DSPs should stick to the lane of representing the buy side.
“SSPs want to be DSPs. DSPs want to be SSPs. I personally don’t believe in that,” Vanderhook said, later adding, “If you look at the Google antitrust suit or any of these, anytime someone gets in that position where you’re representing buyer and seller, that conflict of interest proves too much and usually their own profit margins skyrocket.”
And the jury is still out on how much these solutions can scale, as the incentives for tech that represents both the buy side and the sell side are not always aligned.
“[A DSP’s] entire job is to drive prices down … whereas an SSP’s is to get the best possible price,” said a sell-side ad-tech executive who requested anonymity to discuss industry relations. “You can’t please both of those sides at once.”
