Amid a push for supply-path optimization (SPO), demand-side platforms are going directly to publishers and, in many cases, cutting out supply-side platforms in the process.
Yahoo’s DSP is the latest to do so with the launch of its Yahoo Backstage direct buying solution in June.
Backstage has “a lot in common” with The Trade Desk’s OpenPath, another DSP direct-to-publisher integration that accesses display and CTV inventory through header bidding, said Adam Roodman, Yahoo’s SVP of product strategy and management.
But unlike The Trade Desk, which only recently started working directly with publishers after years of exclusively serving buyers, this isn’t Yahoo’s first foray into the sell side.
Backstage, however, will only include inventory that’s in high demand among Yahoo’s buyers – only the top 10% or so, according to Roodman, which adds up to roughly 100 display publishers and 40 CTV pubs.
Backstage is also a successor of sorts to Yahoo’s shuttered SSP business, which Roodman used to helm. So, while Backstage does, for the most part, cut out SSPs, it also resurrects some aspects of Yahoo’s own SSP – namely, its deal ID tech and its Prebid adapter.
And SSPs aren’t entirely out of the picture. Last month, Yahoo announced server-to-server integrations with FreeWheel, IAS’s Publica and Magnite-owned SpringServe for expanded access to CTV inventory. And advertisers can access much of Backstage’s display inventory through Prebid.
AdExchanger spoke to Roodman about the bigger picture behind Backstage.
AdExchanger: How are Backstage and OpenPath different?
ADAM ROODMAN: We had a comprehensive SSP that’s been pared down. So basic things, like deal ID functionality, are available [out of the box].
Our offering is as controllable for a buyer as any other SSP integration in our platform. If you turn on a campaign tomorrow, all the usual SSPs are going to be turned on. But it’s easy for us to turn them off because we already had an SSP, so our DSP was used to viewing an internal supply path.
Why did Yahoo decide to go in this direction with its DSP and cut its SSP?
If we were doing it for ourselves, we wouldn’t have, because we said goodbye to billions of dollars in SSP revenue.
But publishers weren’t asking for more third-party demand. They wanted our first-party demand. On the buy side, it’s not like they were saying, “Give us as many third-party SSPs to activate against these publishers as you can.” They want to go direct.
Is it correct that Yahoo is not providing yield optimization for publishers through Backstage?
Yes. We don’t need to give you a million price floors for your inventory. That’s an SSP’s job, not ours. Most publishers today know how to operate their header bidding with flooring.
Is Yahoo fully cutting out SSPs?
On the display side there are going to be publishers that we absolutely rely on third-party SSPs [to access] because we’re not going to put them in Backstage. We’ve already released over 1,900 publishers from our old SSP, and we’re buying a lot of them on all the SSPs that you know.
Are you relying less on SSPs for Backstage’s CTV inventory?
CTV is the fastest-growing format – but it’s not 2,000 CTV publishers like it was in web display where you needed a platform to aggregate all that. Advertisers can go direct to the top 40 CTV pubs. So the role of an SSP looks very different in CTV, and Backstage and other direct-to-publisher offerings give the buyer close access to a small set of pubs.
Jounce Media declared Yahoo Backstage to be “MFA-free.” Is Yahoo moving away from monetizing made-for-advertising sites?
If some performance advertisers want to buy MFA, we’re not getting in the way. You can buy MFA inventory on the 60-plus SSPs that we’re integrated with.
But when you buy Backstage, there’s no MFA, and you don’t have to look for a deal ID or signals that don’t exist yet [to avoid MFA], which is what we probably would have done if we still had an SSP.
Are there criteria publishers have to meet to be included in Backstage?
We looked at what our DSP was buying the most of and what delivered the most performance. There were some soft dimensions about how direct and efficient these inventory sources were. If there’s a pub that’s spamming us with an insane amount of inventory and we aren’t buying a lot, that’s not sustainable.
Do you plan to add more publishers?
I could see us going a little larger than the 40 CTV publishers we have right now. But I don’t think there’s a scenario where we grow the list of display web publishers.
With display, it’s still a process of getting the list down so there is only inventory our buyers truly want.
Does Yahoo collect a standard take rate for Backstage deals, or does it vary?
It varies, and we intend it to be lean to represent that we’re no longer operating an SSP or exchange-type functionality.
How does the Backstage take rate compare to your rate for non-Backstage deals conducted through your DSP?
It’s a fraction. I thought you were going to ask me about the SSP. It’s a fraction of both.
From what I’ve heard, most CTV inventory is sold during the upfronts, and then there’s not a lot left available programmatically. Is that a problem for Backstage?
The upfront commitment management tools that DSPs are creating give insight into how difficult and archaic that old process is. It’ll be a slow chipping away to take advantage of what audience-based programmatic buying can do with PMPs instead.
Is Backstage compatible with alternative IDs?
We’ve got ConnectID as our spine and we have interoperability on the demand side.
We’ve been working with all the SSPs to make sure ConnectID is available through them. It just wasn’t part of our old strategy when we owned an SSP.
This interview has been edited and condensed.
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