DSP Pricing, Data Stir Up Inventory Pot

MTV Networks has yet to sell inventory via a “demand-side” platform. Neither has AOL, CBS Interactive or Weather.com. Meanwhile, Turner and Dow Jones are officially saying “no thanks” to DSPs, i.e., the divisions or stand-alone businesses run by agency holding companies designed to purchase online ad inventory using technology and data — rather than directly from publishers.

DSPs, such as Cadreon (IPG) and VivaKi (Publicis Groupe), were a hot topic last week at the Interactive Advertising Bureau annual confab in Carlsbad, Calif., with publisher sentiments ranging from wariness to downright paranoia. And conversations with publishers revealed a sentiment that premium sites should opt out of selling this way.

“If people want to buy from us, we want them to call us,” said Brian Quinn, vp, gm, ad sales for the Wall Street Journal Digital Network.

On the flip side, many agency executives doubt that publishers can hold such a tough stance as online buying becomes more automated.

Publishers are mainly concerned with pricing and data. Sellers fear that advertisers may pay a decent CPM to cherry-pick a specific target on their sites, but may not buy much else, resulting in smaller purchases overall.

“What’s happening here is absolutely the opposite of what is supposed to happen,” said Huffington Post CEO Eric Hippeau. “CPMs have dropped.” That drop is inevitable with the abundance of Web avails, said David Moore, chairman of 24/7 Real Media. “There are no must-buys anymore,” he said.

The other big worry is that agencies will use DSPs to execute a buy, collect a publisher’s audience data and never come back. “That would be like buying a page of a magazine and then getting rights to the magazine’s subscription list forever,” said Walker Jacobs, svp of Turner Sports and Entertainment Digital.

Jacobs said that DSPs require publishers to give up far too much leverage. “They want an open window into our cookies, our data. There are so many fundamental problems with that,” he said.

Not every ad seller is as concerned. “We are approaching this as complementary to our direct sales,” said Peter Naylor, svp of digital media sales for NBCU. But to date, he said the dollars being spent have been purposefully modest. “We’re taking this campaign by campaign,” he said.

Some believe that much of the DSP fear is a byproduct of the recession. “There are a lot of misconceptions over DSPs,” said Michael Barrett, CEO of the yield optimization firm AdMeld. He said that DSPs were primarily aimed at improving efficiency, not appropriating data, which could happen during any ad buy.

Bryan Wiener, CEO of 360i, asked why some publishers use ad exchanges and networks but react “emotionally” about DSPs. “At least the ads that are going to appear from a DSP will be premium ads,” he said.

Wiener and others doubt that publishers will be able to fight off the DSP trend for one simple reason. “As long as the agency controls the budget, they have the most influence over how the marketplace will evolve,” said Alan Schanzer, chief strategy officer at Undertone Networks.