Microsoft’s decision to shutter its Xandr DSP, formerly AppNexus, a pioneer in programmatic advertising, is reverberating throughout the ad tech industry.
As Microsoft itself puts it: “Our commitment to more private and personalized advertising experiences for a conversational and agentic world is not achievable with the industry’s current DSP model and, therefore, it no longer aligns with our investment in this future.”
For those of us building toward that future, this statement underscores what we’ve come to believe: The era of fragmented, adversarial ad tech is winding down. In its place, a new paradigm is emerging: one defined by AI-first, end-to-end platforms, greater efficiency and privacy-first collaboration among buyers and sellers.
At scale, under scrutiny
According to the latest IAB report, the digital advertising industry reached a record $259 billion in revenue in 2024, a 15% year-over-year increase. But with scale comes scrutiny: Every one of those dollars is now measured for efficiency, transparency and ROI.
The days of unchecked growth are over. As legacy platforms exit the stage, the industry needs next-generation systems that deliver the visibility, trust and results that advertisers and publishers now require to justify every investment.
The old standoff between buyers and sellers – and DSPs and SSPs – is giving way to more intentional collaboration. According to the 2024 ANA Programmatic Transparency Benchmark, the share of programmatic spend flowing through private marketplaces and curated deals soared from 41% to 59% in just one year. That shift represents a major recalibration.
Buyers and sellers, no longer satisfied with opaque, commoditized exchanges, are demanding mutual value, premium inventory and strategic partnership. Curated environments are increasingly driving the bulk of programmatic growth, especially in high-value channels like CTV and commerce media.
This shift is crucial as we move from fragmented, cookie-based systems to AI-driven platforms that depend on seamless data flow and trusted partnerships to power real-time, privacy-compliant optimization. Without collaboration, advertisers can’t fully take advantage of AI, publishers lose control of premium inventory and the $259 billion ad economy risks stagnation under mounting regulatory and performance pressures.
Transparency as a competitive edge
Programmatic once had a “black box” reputation. Today, transparency is the industry’s most powerful differentiator. Protocols like ads.txt and sellers.json and the availability of log-level data have transformed the ecosystem, enabling every player to look under the hood and verify who they’re doing business with. These standards have slashed fraud, increased trust and enabled buyers to trace every dollar to its source. This progress stands in stark contrast to the continued opaque practices of today’s walled gardens.
Importantly, as the industry doubles down on inventory quality – reducing the prevalence of resold and low-quality inventory – transparency has only become more essential. Buyers now expect clear, direct supply paths and full visibility into where and how their ads are delivered.
Xandr helped pioneer this shift, and its exit raises important questions: Can the industry uphold these hard-won standards? More importantly, can it build on them? The answer needs to be yes.
Privacy regulation and consumer demand have fundamentally shifted the balance of power dynamics of ad tech. GDPR, CCPA and the slow demise of third-party cookies have forced the industry to rethink how data is collected and used. As a result, publishers and their technology partners now sit at the center, curating audiences and managing data flows.
AI demands integration, not fragmentation
The next leap is already here: AI-powered, end-to-end platforms that unify data, workflows and optimization. Generative AI and machine learning are now automating creative, planning and decisioning in real time. But their full power is only realized when they operate across connected, transparent and privacy-safe infrastructures.
Point solution DSPs and SSPs often fall short of what modern marketers need, especially as demand for AI-driven automation grows. Why limit AI’s potential? The future belongs to those building integrated, intelligent infrastructure – not those holding on to siloed legacy solutions. In the world we’re moving toward, traditional lines between “buy side” and “sell side” will continue to fade.
The road ahead: collaboration, innovation, adaptability
Xandr’s sunset is not an obituary for independent, transparent advertising. It is an invitation to rebuild the open internet on new terms:
- Collaboration with accountability: Buyers and sellers are partners, not adversaries.
- Integration over fragmentation: Efficient, effective media execution requires unified data, workflows and AI.
- Adaptability over rigidity: Architectures must be designed to evolve with the market.
This transition has global stakes, measured in billions of dollars and spanning across every industry. Those who embrace this new paradigm, rooted in transparency, privacy and AI-driven collaboration, will be best positioned to grow. Those who cling to the past will be left behind. The future is here. Let’s build it – together.
“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.
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