WHY WE CAN’T HAVE NICE THINGS — Lila Hunt, Vice President of Display at System1

Lila Hunt: The Path to Reclaiming Publisher Value is Intermediary Transparency

Why can’t publishers have nice things? System1 Vice President of Display Lila Hunt’s take: “We made things cheaper, but we started paying for the same services multiple times.” 


To illustrate, imagine if the adtech ecosystem were something like a grocery store. The ad server is the property manager you pay to rent out the space for your store. The DSPs are the aisles and price signs, helping buyers find the thing they’re looking for (ad placements). And SSPs are the automatic doors that let people into the store. 


For the most part, the value of each component of the store is well understood and justified, each working for some of the lowest costs needed to make the whole place run. The only problem? Each component — the ad server, the DSPs, the SSPs, and other intermediaries like data providers — pays for verification on the same impression. 


In other words, intermediaries take cuts for something publishers and other layers have already paid for. That means less money on the table for publishers. “We could’ve bought a nicer thing, but instead we paid to verify the thing was nice,” Hunt said. 


So, how can publishers prevent these redundant costs and recoup value? 


First, it takes locating sources of opacity. And oftentimes, the source of it is the SSPs and the incentive structures publishers have established with them. With SSPs, publishers have made their priorities clear: pay as little for SSPs as possible while exacting as much money out of them as possible. 


But with the rise of programmatic and the open marketplace, SSPs haven’t been positioned to represent publisher content properly to the buy side. Instead, out of their interest in maximizing their part of the revenue share, SSPs and other adtech layers would rather forgo transparency about where publisher money is going than risk their scrutiny. 


It also doesn’t help that the SSPs and the buy side have cultivated relationships between themselves (including kickback mechanisms), and publishers are the last to know about how much their inventory is actually worth to each party in the ecosystem. This has led publishers to lose ownership of their connection with the advertiser and increased the risk of diluted publisher value. “I’m not in control of my inventory — my SSPs are,” Hunt said. 


Unfortunately, publishers don’t have the means to solve this problem on their own. And of course, they can’t just cut out SSPs full stop — and they shouldn’t. They are integral to publishers staying viable on the open web. But there is one clear way to reduce opacity: “We don’t have this problem with direct,” Hunt said. With direct deals, publishers can have complete transparency, end to end. 


Another way publishers can encourage more transparency among SSPs and other sell-side intermediaries is through multi-pub deals with trusted SSPs. When publishers pool their inventory together, they achieve the scale needed to compete with the big tech platforms and command the attention of advertiser dollars. Because at the end of the day, as Hunt said, the “things we have to do require collaboration.”