Programmatic Inventory Wars, Not A Big Deal; Cannes Event; AI Cognitive Bias

The Programmatic Inventory Wars And Why It’s Not A Big Deal

It has not been a good one year anniversary for OpenPath, TTD’s SPO (Supply Path Optimisation) solution.  The goodwill afforded - by ad tech in general - to the TTD initiative seems to have dissipated.

SSPs and DSPs are now scrapping for their place in the programmatic supply chain.  

DSPs are integrating directly into the header and ad server.  SSPs are going directly to holding groups, cutting deals with holding group trading teams.

ExchangeWire mocked up a nice visual, outlining this on-going supply-chain disruption: https://www.exchangewire.com/blog/2023/03/31/dsp-vs-ssp-when-two-tribes-go-to-war/.

The “entente cordiale” between programmatic buy and sell side is no more. It truly is open season as companies look to cut each other out - particularly in TV where supply is finite. 

Programmatic advertising is going nowhere though.  It’s just going to be a little more consolidated and less reliant on ID matching.  

MadTech is much bigger than a minor subset of media execution.  

After all, we are talking about a $5 trillion dollar industry, which has some really big problems that need fixing - from privacy to targeting to measurement.   

The idea that a multi-trillion market was going to be underpinned by a utopian self-serve, RTB-enabled, ID-powered marketplace was, in hindsight, fanciful.

On this Thursday before we break for the long Easter weekend (2 bank holidays, oh yeah), let’s get some perspective by re-iterating a few important ad-tech-hot-takes for investors and the industry at large:

• In this privacy-first world, the current ID programmatic model will slowly fade in terms of economic significance.  The tussle between the DSP and SSP is the first instance of a wider correction.

• Programmatic won’t die; it will just evolve beyond cookies/IDs for targeting and measurement.  Attention, panel-based measurement and context will be the foundations the new ecosystem.

• Privacy is the most important thing in this industry.  Invest and build with this at the core.

• Outside the US, holding groups and indie agencies are the only way to scale buy-side ad tech.  Never forget that.  Go direct at your peril.

• It’s just really hard to make money from web-based publishers.

• It is possible to scale without the US market.

• The ad net is the greatest commercial model ever seen - and in a fragmented landscape is more relevant than ever.

• CTV will be part of the wider addressable TV market.  A lot of the big streamers will operate walled gardens, running a proprietary ad tech stack to serve ads.  Solving for fragmentation - without a bloated supply chain -  is the real opportunity here.  Focus on planning, targeting and measurement.

• Commerce media will be more about ad tech enablement than middle-man ad execution.

• AI will be iterative in MadTech, adding increased efficiencies.  See it as a tool, and not the destroyer of all things.

• And finally, stop seeing ad tech as just display retargeting.  It lacks vision and undervalues the key importance of the technology layer that powers a $5 trillion dollar market.

Register For The FPC Meet-Up In Cannes

It seems ridiculous to be promoting Cannes events right now - but we are only two and a bit months out from MadTech’s global get-together.  

FPC will be hosting its networking drinks event again at Cannes.  Over 150 industry execs congregated in the salubrious confines of Ma Nolan’s (a veritable Cannes institution).

The afternoon event will take place in Ma Nolan’s on Tuesday, June 20 CET from 4pm to 7pm.  All FPC partners and many of our portfolio companies will be in attendance.  The event is open to all.  We like big tent get-togethers

You can book your spot here:

https://www.eventbrite.co.uk/e/firstpartycapital-drinks-cannes-lions-tickets-604029978927?aff=ebdssbdestsearch

Peak AI Hysteria 

It feels like the world has gone a tad OTT on the potential dangers of AI.  An open letter from various tech and AI research luminaries have called “for a six-month pause on AI development”.

Have we hit peak AI hysteria?  The fear of AI causing some catastrophic event is now top-of-mind for everyone.  

Anti-tech sentiment is deeply rooted in the human consciousness now.  Sci-fi films and TV series, pushing AI horror porn, permeate modern culture. Literature is dominated by the apocalyptic effects of man-made technology.  And journalists just love end-of-days drama.

This is fuelling a lot of the cognitive bias towards technology.  AI (in general) is the latest tech target.

Of course, it’s imperative to have guard rails for transformational tech like generative AI.  But it’s also crucial to have a balanced view of the pros and cons. 

With that in mind, FPC is recommending a great episode from The Big Technology podcast.  This week’s edition includes some excellent insights from VCs investing in the space, Joe Marchese and Michael Mignano.

You can listen to it in full here:

Always keep an open mind. 

And on that instructive note, readers, FPC hopes you have a great Easter weekend.