Why do SSPs (Supply-Side Platforms) Matter in Video Advertising?

A video advertising campaign can be very complex and challenging to execute. It consists of many factors in order to be set up for success. Extensive media planning, development of engaging creative, a deep understanding of the target audience, tracking viewership patterns, and more are reviewed and developed into strategies by marketers before campaign launch to ensure their video media will make an impact. How they take action on these strategies brings forth the largest challenge yet, as the video landscape is filled with millions of publishers and placements.

Today, we'll provide a deep dive into how marketers secure the inventory across these publishers to run these campaigns specifically as it relates to digital. We’ll provide a detailed analysis of the supply-side platform and will go through the history of advertising that drove the innovation of creating an SSP benefiting both buy-side and sell-side advertisers.

What is an SSP?

A supply-side platform (SSP) is software publishers use to automate the management, sale, and optimization of their ad inventory. SSPs are a critical component of the programmatic advertising ecosystem, connecting publishers to multiple demand sources like ad exchanges, demand-side platforms (DSPs), and ad networks, allowing advertisers to access millions of online publishers at scale in an automated fashion.

SSPs have revolutionized video advertising by introducing automation, easing the execution of video campaigns allowing for more advertisers to leverage advertising coveted medium to deliver their messaging to consumers. While the automation SSPs have provided massive innovation to the advertising industry, they are still transforming advertisers' access to inventory on the “big screen” in an automated way.

The History of Advertising that Lead to Supply-Side Platform Creation

The history of supply-side platforms started in the mid-2000s as a solution for publishers to optimize and automate the sale of their digital advertising inventory. Let's take a look at the evolution timeline of SSPs and their effect on TV advertising.

Early Days of Advertising Focused on Linear TV

Before the digital era we are in today, traditional video advertising was mainly on TV and was sold manually. Sales teams negotiated deals directly with advertisers and their agencies. Resources for understanding where your audience could be found were limited to TV ratings, TV schedules, and demo targeting. No other insight was readily available due to a lack of automation, causing limited planning and long waits for campaign reporting, which often came months after the advertisements would air.

While there were limited audience insights and automation, the mass reach of consumers and premium content ruled this era of advertising. There were only a handful of TV publishers, and each had a high viewership, allowing them to sell many ad spots at a premium price. Due to the premium nature and high reach, this time was considered an advertising golden age, but the process of executing these campaigns was flawed. It required many people to manage inventory and delivery, advertisers had to work with each TV publisher directly, and reporting on delivery often came months after advertisements aired. This created a challenge for advertisers, but there was no other way to reach these consumers until the “new media era” (also known as the digital era) came to life.

Introduction of Digital Advertising and SSP Creation

As digital became more mainstream in the late 90’s, advertising budgets began to shift from TV to online. While there was a shift, TV still owned the lion’s share of the budget due to it’s reach but also due to it’s ease of execution when compared to digital. Online publishers had to do tons of manual work, just like TV publishers, keeping track of their inventory and fill rate but they had nearly 100x more placements to track. This created a lot of work for advertisers and agencies since they had to reach out to each publisher individually to place their ads.

In the mid-2000s, SSPs began to be introduced. This allowed for publishers to release their advertising avails into a technical platform that advertisers and agencies could access to buy inventory to place their ads. This enabled publishers to sell digital display impressions more efficiently and at scale. These supply-side platforms slowly introduced video placements and began to lay the groundwork for future automations as video would soon advance further than anyone could imagine.

Expansion into Connected TV (CTV)

The late 2010s are known as the time of the rise of CTV streaming services. Platforms like Hulu, Pluto TV, and Roku created new opportunities for TV advertising by bringing TV shows right to your laptop. This shift in viewership created a new avenue for advertisers, but luckily, the industry had already laid the groundwork with automation through the development of SSPs. SSPs adapted to support video formats, specifically full episode players, to ensure that they were able to still reach their audiences as viewership began to shift digitally. SSPs also began to integrate proper CTV placements that went beyond full episode players found on web pages and placed your ad on the “big screen,” allowing demand-side platforms (DSPs) to enable real-time auctions for the TV viewership experience.

Current Video Trends and The Future

Today, SSPs help digital media owners and publishers sell TV ads and have revolutionized how TV ad inventory is bought and sold, bridging the gap between traditional broadcasting and digital programmatic advertising. More and more TV publishers are releasing their inventory to SSPs as they adapt to the viewership shift we are seeing from consumers. While more players have gotten into this space, there have been discussions around CTV fraud and the “CTV Tax” that marketers are looking to navigate and develop solutions for.

As for the forecast for the near future - AI-driven solutions and deeper integration with audience measurement tools are continuing to shape the market. Marketers and advertisers are coming together to continue video innovation, fight CTV ad fraud, and find more ways to automate video advertising execution to cut back on the CTV tax.

How does the supply-side platform work?

The process of buying and selling video ads used to take weeks or even months. SSPs have dropped this time down to milliseconds. All methods are automated and blind; ad space sells at the best possible price and with minimal manual work. Below is a step-by-step breakdown of how SSPs function:

Inventory Setup

Publishers determine the number and schedule of advertising slots and list their available ad inventory on the SSP. They define different parameters for the ad slots based on how they value the media and the functionality of the spots available. These parameters include price, ad formats (15, 30, or 60 seconds), audience targeting, and advertiser filters (e.g., blacklisting or whitelisting specific advertisers or industries).

Ad Request

SSP categorizes all the inventory input by publishers, creating a marketplace for activation platforms to pull inventory from. The SSPs inform activation platforms there is inventory available by sending bid requests to multiple demand sources. Advertisers leverage their demand-side platforms (DSPs) to create their bids with specific targeting parameters based on who they want to reach and how much they are willing to pay for ad slots.

Determining the Winner

SSP picks the highest bid that meets the publisher's request and sells the ad slot. As a result, advertisers get slots that meet their targeting parameters, and publishers get the best prices and fulfillment of their inventory. Supply-side platforms provide advertisers with inventory and provide publishers with analytics. They can track fill rates and other different metrics - including CPMs, clicks, impressions, and advertiser performance. This analytics helps publishers optimize their inventory pricing and targeting strategies.

What challenges do advertisers face using SSPs?

While supply-side platforms make the process of buying inventory easier and faster, publishers and advertisers do face some challenges. These challenges stem from technological complexities, inefficiencies, and evolving market dynamics. Below are the top three we see today.

1. Ad Fraud

Ad fraud remains a significant problem in the ad industry, especially in video. Bad actors use different methods to get money without providing real services, such as bots, domain spoofing, fake impressions, click injection, wrongly classified inventory, and cloaking manipulation. Leveraging technology to pre-filter inventory and also being aware of key things such as extremely low CPMs will help combat fraud.

2. Transparency Issues

SSP users often face a lack of transparency in auction mechanics. The lack of transparency is often due to the SSP aggregating multiple inventory sources leveraging different metadata. They are focused on making the inventory easier to access but are not always great at editing out wrongly classified inventory or inventory that is missing key metadata. This creates problems with brand safety as advertisers struggle to verify where their ads are displayed or whether they are reaching the target audience. Pushing publishers to provide metadata and SSPs policing this policy will help with transparency issues.

3. Ad Tech Tax

The goal of SSP developers is to make it more sophisticated and data-driven; this may lead to more accurate and effective software improvement, but it ads another platform into the ad execution ecosystem, creating an additional “tax” on working media. Now, advertisers need to pay SSPs, DSPs, data targeting, and more to get their ads placed. Advertisers need to focus on pre-qualifying as many impressions as possible to help fight this tax and increase the value of their working media.

Finding the Right Partner for Your Video Advertising Activation

Supply-side platforms (SSPs) are essential tools for publishers to manage ad inventory, optimize revenue, and streamline advertising transactions. SSPs alone cannot address the full spectrum of challenges advertisers face. Audience fragmentation, cross-channel targeting, media planning capabilities, and campaign measurement are all things that advertisers need to navigate, which means they need a partner that understands SSPs and the other platforms in the industry that will help them achieve their KPIs. Simulmedia sits in the center of the video ecosystem. We can help you navigate the complicated SSPs landscape by offering advanced capabilities that enhance advertising workflows and outcomes.

Simulmedia’s patented TV+ platform is a comprehensive planning, buying, activation, and measurement solution designed to optimize cross-channel video campaigns. As proprietary software, TV+ enables advertisers to select placements from a vast inventory and reach their target audiences more efficiently — the result is a stronger return on investment and clear attribution from new prospects to converted customers.

Simulmedia adds even more value by working across many SSPs, using our data-driven methodology to identify the most effective ad opportunities. By combining our patented technology with broad integration capabilities, we ensure that brands achieve the highest efficiency, reach, and performance.