Are Latin American Publishers Adopting Supply Side Platforms?
While demand side platforms (DSPs) continue to propagate across Latin America, major supply side platforms entering the region experience some resistance from publishers or at least are not fully understood by them. So, are Latin American publishers really adopting SSPs or not? Lorena Hure, a digital marketing expert in our editorial staff, asked several major players to answer the above question.
On the one hand, supply side platforms seem to aid publishers in their selling process; however, on the other hand, as these platforms introduce the concept of cost-efficiency and automation, publishers are faced with the challenge of redefining their operations and business models.
According to Lucio Grimaldi, Managing Director for Latin America at Publicitas, “the main obstacle still remains a cultural and business shift in the way that publishers have been monetizing their digital inventories. Working with a SSP platform implies a completely different business model and this has been the major challenge for publishers, who have been working differently and relying on traditional digital sales for a long time. I also believe there is still a fear from publishers that the SSP model will ‘cannibalize’ traditional digital sales and reduce CPMs significantly. Thus, it’s key for publishers to have the right SSP partner/approach and a clear inventory and monetization strategy in order to be successful in this transition.”
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The fact that some LatAm publishers consider the entrance of supply side platforms as potential threats to the level of their eCPMs, is reflective of another important factor when it comes to challenges in the region: Lack of education. As Fernando Narcio, Regional Manager Latin America at PubMatic puts it “I think that the biggest obstacle for programmatic adoption in Latin America is education. Given the rapid change in the industry, many publishers need to be brought up to speed in terms of what programmatic is, what are the roles of the different players in the eco-system (DSPs, SSPs, Exchanges, DMPs, etc.) , and how programmatic can help them maximize the value of their digital assets.”
Even if Brazil often has its own logic, the situation is similar to the one experienced in the rest of Latin America. According to Rafael Pallarés, Manager Director at Aunica, “the Brazilian market faces several challenges regarding programmatic advertising, and the low levels of acumen among the digital community and loose guidelines are the greatest among them. As secondary challenges, publishers need to better organize and package data in order to take more value out of their assets, and players in the ecosystem should define their roles with more clarity – many players claim to be DMPs, DSPs or SSPs, for instance, without carrying the core expertise and technologies to claim so.”
Publishers need to better organize and package data in order to take more value out of their assets.
SSPs platforms challenged
As we have seen, in order for publishers to incorporate supply side platforms across the board, not only training and education will be needed. Additionally, the lack of confidence in this technology needs to be overcome. This is quite a challenge for SSPs willing to gain new markets in the region.
In order for publishers to incorporate supply side platforms across the board training and education is needed, this should help to overcome the lack of confidence that still exists in the technology.
Patrizio Zannatta, Managing Director Latin America at Rubicon Project, suggests that “ it’s certainly not for a lack of willingness to experiment or innovate. I think Latin America is in a similar position to Italy when I began working there for Rubicon Project: the only thing lacking was perhaps a little understanding and confidence in what is still a relatively new technology. In Italy, we saw the majority of the top 50 sellers embrace automated advertising within a matter of months. Every market is of course different and the way we have seen sellers using the technology in different, and often creative ways to suit their individual businesses could be especially interesting. Global media agency Magna Global predicted that programmatic will make up between 60 and 70% of digital ad revenues in the three major Latin American markets by 2018”.
When asked about the challenges being faced by publishers, Guido Conterno, executive director at GDA, stated that as for “supply side platforms, there is the fear of use of the cookie re-targeting the SSP can do, whereas as for programmatic buying, contextual audiences via programmatic are sold at low prices; user audiences and private deals have higher prices. Once these Private Marketplaces are set and there is no spillage of the Publisher’s Users cookies outside the market place, programmatic will grow in the region”.
The real challenge is not only on the part of the publishers who should implement this technology, but also on SSP service providers.
The adoption of Supply side platforms in LatinAmerica, even if not yet widespread, seems to be imminent. It is all a matter of seeing how 2015 develops, considering that there is a promising outlook for programmatic buying in the years to come. The real challenge is not only on the part of the publishers who should implement this technology, but also on SSP service providers who should work hand in hand with publishers in order to help them incorporate it.