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The independent demand-side platform The Trade Desk has implemented the new digital video protocol introduced by the IAB Tech Lab in March, an endorsement that could spark industrywide uptake and position the company as a catalyst of change within the ecosystem.
But a lack of clarity surrounding key elements of the transition, such as when it will occur and how dramatically it could affect video revenues, has left some publishers anxious.
The new updates concern the classification system that buyers and sellers use to label and transact on digital video inventory, a channel whose total ad spend is projected to increase 17% in 2023 to $55 billion, according to the IAB 2022 Video Ad Spend & 2023 Outlook report.
The new protocols—which add two new tiers, accompanying and interstitial content, to the standard in-stream and out-stream taxonomy—have been welcomed as a beneficial upgrade for the ad-tech ecosystem, as they will provide media buyers with more transparency into the kind of video inventory they are bidding on, according to interviews with experts.
However, by adding new tiers to the existing hierarchy, the specifications also threaten to reduce the revenue that publishers generate from their video inventory. Under the new system, many publishers’ video inventory will qualify as accompanying content, rather than true in-stream video, netting them lower yields.
“If you are a publisher, this feels like a sudden change that has the potential to be particularly disruptive for our revenue projections,” said a director of ad operations. “This change needs to happen, but I wish there were not so much uncertainty.”
In becoming the first DSP to publicly embrace the new protocol, The Trade Desk has signaled to the industry—as well as to its agency and brand clients—how seriously it plans to take the updates.
The move also positions The Trade Desk as a powerful source of enforcement within the ecosystem, as the IAB Tech Lab typically relies on the support of an authoritative demand-side partner to transform its policies into practice, said Chris Kane, founder of programmatic ad consultancy Jounce Media.
“It takes the IAB to build a standard and then it takes some big, powerful ad-tech company to drive adoption,” Kane said. “For video-placement definition, that big company is The Trade Desk.”
More carrot than stick
When the IAB Tech Lab first canonized the new specifications in March, analysts predicted it could take up to six months before the updates reached the critical mass necessary to spur wide-scale adoption, although the technical lift required is relatively light, according to Peter Cunha, managing director of ad management at Sovrn.
But an email sent by The Trade Desk in March to its supply-side partners suggests a more expedient timeline.
In the first part of the email, The Trade Desk detailed a new initiative centered on inventory efficiency, part of a larger effort from the company to reduce inventory deduplication in the bid stream. This section called for supply-side partners to make necessary adjustments to their bid protocol by June 1.
In the second section, The Trade Desk announced that it had adopted the recently passed IAB video specifications, but offered no deadline for others to do the same.
As a result, some SSPs and publishers conflated the two initiatives and their timelines into one, according to interviews with six SSPs.
The confusion led some publishers to panic, as the commercial implications of the switch remain unclear and a June 1 timeline would have given them little time to prepare or properly forecast.
However, such fears are—at the moment—unfounded. The Trade Desk has adopted the new specifications, but it has no plans to penalize or throttle the demand of supply-side partners who are not in compliance, according to Will Doherty, vp of inventory development at The Trade Desk.
The need for an enforcer
In addition to the commercial implications of adopting the new standard, The Trade Desk’s immediate endorsement of the video specifications reflects its increasingly important role as a power broker within the ad-tech ecosystem.
“The DSP space has been very fragmented. The Trade Desk matters tremendously more,” said Ari Paparo, CEO of Marketecture Media. “They have shown a history of being very aggressive with the supply side with quality.”
Paparo pointed to the ad-tech firm’s influential decision last year to shut off Google’s Open Bidding as a path of supply, after which two other DSPs followed suit, as Adweek first reported.
This is not the first time a powerful DSP has helped transform a spec from policy into marketplace reality. The ads.txt protocol, which adds transparency to the programmatic supply chain, became more mainstream because of DSP enforcement, particularly Google’s DV360, Kane said.
Still, video inventory can be particularly difficult to police, which is partly why there was a need for a standard in the first place, Kane said. The Trade Desk declined to detail exactly how it would enforce this policy.
“Video experience is one of the hardest standards to verify, and it’s where there has historically been the poorest enforcement of ad tech inventory policies,” Kane said.
