A commonly accepted narrative is that MediaMath went bankrupt because it didn’t sufficiently focus on agencies – but this isn’t totally true. In fact, MediaMath always provided agencies with good customer support.
MediaMath’s missed opportunity was actually around product. It failed to introduce essential features demanded by trading desks, especially in view of an increasingly competitive DSP market.
Let’s delve into the agency perspective of MediaMath’s journey, the implications of its bankruptcy and the potential impact on future DSP selection.
Great at services, less in product
MediaMath was a DSP pioneer, and agencies adopted it early. The MediaMath leadership team was a formidable Who’s Who of industry heavyweights. Agency stakeholders wanted to work with them.
However, even at this early stage, MediaMath grappled with perception issues due to minimal features in its self-service platform, especially compared with Google DV360. MediaMath went to market with managed services first, launching self-service later. But the feature gap between its UI and Google’s was stark.
At this point, MediaMath made its well-publicized bet on client-direct business, and this was reflected in its product focus.
For example, it invested heavily in building a DMP and deprioritized robust video support until later. The Trade Desk took the opposite approach by focusing on the agency trader. It cannot be overstated how important TTD’s introduction of bid modifiers – and later, Koa auto-optimization – were to the whole DSP ecosystem. MediaMath, among other providers, saw a deceleration in agency investment due to its failure to catch up.
That said, its presence was still visible at agency trading desks. A common scenario was one where MediaMath had a direct relationship with a brand, and agencies were instructed by that brand to use it on their behalf.
However, product feedback from agency traders about MediaMath’s trading tools was generally negative due to its lack of features. Yet the DSP shined in client services, providing office hours, campaign health checks, etc. It was a company with a well-liked team, but one that didn’t offer an industry-leading trading product that agencies wanted to use.
In early 2023, MediaMath launched its best-ever UI. But it was too late.
Lessons learned
Most agencies learned about the MediaMath bankruptcy from AdExchanger’s reporting. Expecting a period to wind down and transition campaigns, agencies found out campaigns were ending immediately.
As campaigns moved elsewhere, it became obvious that virtually all of MediaMath’s tactics could be replicated in other DSPs. This symbolized MediaMath’s core product issue: It was commoditized and lacking differentiation.
The bankruptcy has reverberated through the industry already, impacting how agencies look at supplier evaluation. The event disrupted client business, so it became essential to reevaluate agency scorecards to avoid future disruptions.
This reevaluation places a heavier weight on the financial health of partners, reflecting positively on public companies whose financials are known and more negatively on startups with questionable balance sheets. Extra weight has also been assigned to product differentiation, with “preferred” status assigned to the most specialized DSPs.
The bankruptcy is likely to drive more platform consolidation, with a migration away from partners that excel primarily in services.
Sifting through the rubble
Now more than ever, DSPs must differentiate in products to survive. Essential features include full omnichannel support, non-cookie IDs, advanced optimization features and more. DSPs must excel and innovate in these areas.
Another key trend is that DSPs must provide open APIs to integrate solutions that automate campaign optimization or tie to offline results. Agencies demand partners that can drive results and innovation, all while saving the agencies time.
Perhaps the silver lining to MediaMath’s failure will be more product innovation in the programmatic ecosystem.
“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.
Follow Good Apple and AdExchanger on LinkedIn.
For more articles featuring George Tarnopolsky, click here.
