The S&P 500 — no, not that one!

Let’s deep dive on The Trade Desk’s new SP500+ curation product.

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The S&P 500 — no, not that one!

The Trade Desk recently released their proprietary inventory curation tool, the awkwardly-named Sellers and Publishers 500+, and we’re going to talk about what it means, why they did it, and what might be next.

Isn’t this just an include list?

Yes, and no.

Yes, essentially TTD has created an include list based on various pretty reasonable criteria. The criteria disclosed include reasonable ad loads, limited ad refreshes, and direct inventory sales.

No, this is actually a pretty big deal. TTD has implemented the include list at the system level, and set it on by default. You can tell they are serious when they have a whole page about the functionality in their API docs. If you are an API user of TTD (which many big buyers are), the SP500+ is on for all new campaigns until your engineers do something about it. That’s the power of defaults.

What is TTD hoping to accomplish here?

TTD is playing some 3D chess here. I’m honestly pretty impressed.

First, they are dampening the ongoing conversation about made for advertising (MFA) sites and poor quality inventory. The company previously disavowed buying on MFA sites, but by putting a boundary around which parts of the “Open Internet” have the company’s stamp of approval they are further distancing themselves from the conversation. You want to buy crap, go ahead but we did everything we could to stop you.

Second, they are trying to stem the trend that is trying to turn the DSP into a dumb bidder. This is seen clearly in the rise of curation, which puts the audience definition on the sell side and turns the DSP into a dumb deal-id pipe. We also covered this in the newsletter when we covered growth of non-biddable CTV inventory.

It is worth reading what TTD is saying about SP500+ or just watch their video. The argument they make is that relying on deal ids or PG deals reduce your reach. Instead, they reason, you should leave the audience definitions in the DSP, and rely on SP500+ to deal with quality. This is really smart considering how much of TTD’s margin is made on data.

The third pillar of TTD’s strategy with SP500+ is to put up a velvet rope in front of the second-largest source of demand in programmatic and clearly show publishers they better come correct if they want to get into the club.

The DSP as club bouncer

There’s a lot of ground that we’ve covered previously here, so we’ll review quickly. The sell-side of programmatic has perverse incentives. Publishers can work with as many exchanges as they like and generally experience marginal yield gains when they do. Exchanges want to blast QPS to as many buyers as possible, as often as possible, and won’t stop unless someone tells them to. Basically there is a tragedy of the commons problem on the sell-side.

DSPs, on the other hand, have real hard expenses they incur from the growth in QPS, and bidding algorithms are defeated by duplication and poor signals from activities like reselling. As a result, the DSPs have been engaging in a decade-long process of reigning in supply, generally known as Supply Path Optimization (SPO).

Where this gets more interesting is when the larger buyers don’t just shut down or trim volume from the sell-side but use their clout to enforce quality standards and fundamentally shape the supply. TTD has been a pioneer in this effort. Some examples:

• April, 2020: TTD requires SSPs to stop sending duplicate requests

• Feb, 2022: TTD stops bidding on Google’s Exchange Bidding/Open Bidding

• August, 2023: TTD will ignore SSP price floors

• June, 2024: TTD to block mislabeled Yahoo inventory

Have you seen my tinfoil hat?

Editor’s note: Tin was replaced by aluminum in “tinfoil” as far back as 1910.

To continue beating this “club bouncer” analogy to death, everyone knows there are less savory ways to get past the velvet rope, starting with slipping a Benjamin into a greased palm.

There are two highly strategic TTD initiatives that are dependent on publisher adoption: OpenPath, and UID2. It isn’t too hard to imagine that participation in one or both of these could tip the scale on whether you’re in the 500+ or waiting in the rain. Maybe not this year. But hard to say that never happens.

Can we talk about the name?

Despite consistently proving themselves to be the smartest guys in the programmatic room, TTD has a habit of just horrendous product naming. Kokai, anyone?

Jeff: We’re gonna call this the S&P 500

Lawyer: Um, that’s taken. How about anything else? Publisher 500? P&S 500? S&P 100+? Literally anything else?

Jeff: Nope, that’s the name.

Of any name they could have picked, they chose one so similar to the S&P 500, a brand that’s been around since 1957, that they don’t appear at all when you Google results even if you search for “SP500+”.

Also, what’s up with the “+”? This is like one of those “99 cent” stores that got hit by inflation, then had to change their name. Is it 500, or more than 500? And they makes sure to point out that it is actually thousands of websites covered by the 500+ sellers. So what’s the point of the number at all?

And, for brand consistency, the 500+ came out just a couple months after they published their inaugural “Sellers & Publishers” report in which they use other poorly defined terms like the “Premium Internet” and strangely publish a ranked list of the top 100 (not 500 or 500+) sellers and publishers.

While I’m ranting, if the SP500+ only includes direct sellers, then why the complexity of including the words “Seller”?* Just call this the Publisher 500 or the Media 500 and be done with it.

* I believe they wanted to include exclusive sellers like Raptive, but still!

Reading list

• Lauren Wetzel is the new CEO of InfoSum!!!

• The DOJ’s witness list for the Google Antitrust Trial is out, and Ari isn’t on it. AdExchanger gives a rundown.

• Study: For every 1,000 searches on Google in the United States, 360 clicks make it to a non-Google-owned, non-Google-ad-paying property

• Index Exchange finds 33% reduction in publisher revenue from removal of 3P cookies

• Nextroll Sandbox testing finds buy-side CPMs up 3x and CPCs up 2x

• Microsoft’s Xandr sued for GDPR violation in Italy

• Teads reportedly exploring a sale

• Paramount Global agrees to merge with Skydance Media