The Marketer’s
Guide To
Programmatic
Reselling
A practical guide for navigating the complexities ofthe programmatic supply chain

About thisresearch

We published the first version of this whitepaperin May 2020.
Since then, the programmatic supply chain andthe industry standards that govern it have rapidly
evolved. Most notably, in April 2022, the IAB
Tech Lab released new guidance for how
publishers can signal supply chain directness tobuyers and how buyers can use those newsignals (see here).
In this updated whitepaper, we re-introduce aframework that programmatic buyers can use to
identify value-adding direct and indirect supply
chains, and we recommend practical steps
marketers can take to exclusively transact withtrusted counterparties.
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Who Does The
Exchange Pay?
A simplistic understanding of the programmatic supply chain is that ad exchanges
establish connections between DSP demand and publisher supply. In this model, theDSP pays the exchange, and the exchange then pays a publisher.

The exchange sources supply directly from the publisher and sources demand
directly from the DSP.
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Who Does The
Exchange Pay?
But a common variation of the programmatic supply chain is the case where an
exchange sources supply indirectly from an intermediary. In this model, the DSP pays
the exchange, but the exchange then pays the intermediary instead of the publisher.
This intermediary might pay the publisher, or it might pay yet another intermediary.

These multi-hop supply chains have an understandably negative reputation in the
supply landscape, and the default view of programmatic buyers is to cut out the
middleman by blocking all resold auctions.
4Variations Of Reselling
In our view, though, this broad brush approach to reselling is misguided. Our
research surfaces many variations of reselling – some wasteful and some valuable.
Value-extracting intermediaries continue to soak up irrational demand, andprogrammatic buyers need to actively block these resold auctions. But programmatic
buyers also need to identify and proactively transact with value-adding intermediaries
that unlock unique access to high quality supply.
We maintain crawlers that retrieve all publicly disclosed data about authorized
programmatic supply paths – ads.txt files, app-ads.txt files, sellers.json files, and app
store metadata. We also partner with programmatic buyers that contribute theircampaign data to inform our research. The resulting data set contains detailed supply
and demand profiles for over 1.5 million websites, mobile apps, and CTV apps.
Having studied hundreds of supply-side advertising technology companies that power
auctions for these websites and apps, we think marketers can organize their supply
path optimization strategies around four major categories of indirect supply chains:
Outsourced Yield
Management

The delegation of sales rights from the publisher to amonetization partner for a minority of user sessions.

2 Content Syndication

Partnerships in which a content owner distributes its
content via a third party website or app in return foradvertising sales rights.

Proprietary
3
Placements

Ad placements, typically with non-standard creative
executions, that are exclusively monetized by acompany other than the publisher.

4 RebroadcastingAuctions for which the seller does not control the final
ad serving decision.

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Publisher-Controlled
SupplyAs a point of reference, let’s first clarify what the industry currently considers “direct”
supply. One example of direct supply is Index Exchange’s integration with GoodHousekeeping. Good Housekeeping’s ads.txt file (here) provides two importantpieces of information:
ownerdomain=hearst.com(This tells us Hearst is the owner of goodhousekeeping.com)

indexexchange.com, 187614, DIRECT(This tells us Index account 187614 is authorized to sell Good Housekeeping’s inventory)

We can then cross-reference this information with Index’s sellers.json file (here). In
that file, we find the following information:{"seller_id": "187614","name": "Hearst Magazines, Inc.","domain": "hearst.com","seller_type": "Publisher"}
We can now verify that Index seller ID 187614 is indeed a direct supply chain:

DSP

The combination of Good Housekeeping’s ads.txt file and Index’s sellers.json filevalidates that Hearst (the owner or of Good Housekeeping) has a direct financial
relationship with Index and authorizes Index to conduct RTB auctions for ads on
Good Housekeeping. DSPs pay Index, and Index then pays the publisher.
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Sales House-Controlled
SupplyBut not every publisher has Hearst’s scale and sophistication. Consider Joy The
Baker. Joy Wilson leads a five person team that publishes joythebaker.com. Joy
describes herself as a “baker, photographer, cookbook author and teacher.” She andher team are not ad ops professionals, so they partner with a company called Cafe
Media. We know this because joythebaker.com/ads.txt declares the following:
managerdomain=cafemedia.com
There is no supply chain on joythebaker.com for which an exchange pays the
publisher. All payments flow through Cafe Media:

DSP

Exchange

There are thousands of small media companies like Joy The Baker that are exclusively
represented by monetization specialists like Cafe Media. In our view, there is nofunctional difference between the monetization service that Hearst’s in-house teamprovides to Good Housekeeping’s editorial team and the monetization service that
Cafe Media provides to Joy The Baker’s editorial team.
We handle this with a notion of a“primary seller.” There is exactly one
company (either the publisher or an
exclusive sales house) that controls
programmatic monetization for eachwebsite, mobile app, and CTV app. If thechain of payment is DSP > Exchange >Primary Seller, the supply chain is direct.
Any other chain of payment is reselling.

What Is A Direct
Supply Chain?
Directly-sourced supply represents
cases where the exchange issues
payment to the “primary seller” – either
the publisher or an exclusive
representative of the publisher.
7Outsourced Yield
Management
By this definition, many supply chains are almost – but not quite – direct. Consider
Meredith’s inventory (for which Meredith is the primary seller). When a consumer in
the US visits people.com (a Meredith property), direct supply chains look like this:DSP

Exchange

But Meredith outsources monetization of its Canadian traffic to Rogers Media, which
has a scaled sales presence in Canada. When a consumer in Canada visits that same
people.com article, the most direct available supply chain looks like this:DSP

Exchange

This second supply chain contains an extra payment hop. The DSP pays theexchange. The exchange pays Rogers. And Rogers handles final payment to
Meredith. That’s not a direct supply chain, but it’s the most direct available path for
Canadian user sessions.
Similar outsourcing arrangements are also common in the emerging connected TV
supply landscape. Consider Pluto TV. Direct supply chains to Pluto TV look like this:DSP

Exchange8Outsourced Yield
Management
But distributing the Pluto app across every internet-connected TV requires Pluto topartner with nine different CTV app stores (Roku, Amazon Fire, LG, etc.) In return forcarrying and promoting Pluto TV, app store operators often negotiate exclusive sales
rights for a portion of ad pods, creating supply chains that look like this:DSP

Exchange

Buyers who want full access to Pluto’s CTV inventory must transact with supply chainintermediaries like LG that have negotiated exclusive sales rights.
Rogers is not the primary seller ofpeople.com, and LG is not the
primary seller of Pluto TV, but bothcompanies have exclusive sales
rights for some user sessions.
Publishers who outsource some, but not all,
Unlike Cafe Media, theseof their pageviews to a third party operate acompanies do not replace thespecial kind of reselling that we called
publisher. They supplement the
Outsourced Yield Management.
publisher, unlocking uniqueinventory that can only betransacted via indirect supply chains. The exchange pays a company that is not the
primary seller, but that seller has exclusive right of sale for a particular user session.
We call these scenarios “Outsourced Yield Management” and recommend buyers
evaluate these indirect supply chains with the same KPIs that they would evaluate
direct supply chains. Buyers may or may not want to transact with Rogers or LG orother similar intermediaries. But these companies should not be disqualified from a
media plan on the basis of directness.
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What Is Outsourced
Yield Management?

Content Syndication
Content syndication is another variety of not-quite-direct supply chains. Content
owners commonly distribute their content across third party websites and apps toreach new audiences. These arrangements exist across all programmatic channels,
but they are most notably present in the connected TV supply landscape.

Most CTV supply is not controlled by the app developer.
In the connected TV arena, marketers need to navigate a complex set of media rights
agreements that exist between programmers (the company that owns the content)
and distributors (the company that owns the connected TV app). These businessagreements have existed in broadcast TV for decades, and they are now being
extended to programmatically-traded TV.
As an example, imagine a consumer who opens the pre-installed Samsung TV Plus
app on her Samsung Smart TV and watches an episode of The Walking Dead.
Samsung TV Plus carries content from many content owners, similar to a traditional
cable operator. And like a cable operator, Samsung negotiates carriage agreementswith programmers like AMC (the owner of The Walking Dead). These carriage
agreements can take many forms, and the details are not publicly disclosed, but they
commonly include terms that give the distributor rights to sell some ad inventory andthe programmer rights to sell other ad inventory.
Direct supply chains for the Samsung TV Plus app look like this:DSP

Exchange

The DSP pays the exchange, and the exchange pays the publisher.
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Content Syndication
But most AMC content on Samsung TV Plus is not sold this way. It is more common
for the programmer to control the sales process, and in this more common case, thesupply chain looks like this:DSP

Exchange

Samsung’s app-ads.txt file provides a useful signal about this carriage agreement:
inventorypartnerdomain=amc.com(This tells us AMC has sales rights in the Samsung TV Plus app)
AMC is a publisher, but they are not
the publisher in this context. Samsung
is. Samsung develops the app, owns
the customer relationship, and has fullcontrol of all ad serving decisions. In
our language, Samsung is the primary
seller, and AMC is a supply chainintermediary.

What Is Content
Syndication?
Content owners that monetize theircontent in third party websites andapps operate a value-added form ofreselling called Content Syndication.

But AMC is an unquestionably value-adding supply chain intermediary that hascontractual rights to sell the majority of ad breaks against its syndicated content.
Along with their peers, programmers like AMC control sales rights for the majority of
inventory in multi-channel CTV apps like Samsung TV Plus. Any reasonable marketer
would recognize that transacting with AMC is equivalently direct to transacting with
Samsung. More generally, transacting with a content owner is equivalently direct totransacting with the app developer.

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Proprietary Placements
The last variation of value-added reselling is Proprietary Placements, in which the
publisher delegates control of select ad placements to a third party monetization
specialist.

Across all channels, but especially the web, it is common for
specialized ad tech vendors to secure exclusive right of salefor certain ad units.
Proprietary placements operators might fill their exclusive ad units with hand-solddemand, with demand sourced from a direct DSP integration, or with demandsourced indirectly through reselling exchanges. The key, by our definition, is that the
publisher does not control the ad serving decision for a proprietary placement.
Take as an example placements thatare powered by Taboola. Readers of thisreport will likely recognize Taboola’s
feed-based native units that are
deployed across tens of thousands ofwebsites. On ESPN, for example,
Taboola owns a content feed at thebottom of most article pages, andTaboola exposes these ad opportunities
to DSP buyers. In some cases,
especially for Taboola’s native formats,
DSP buyers can bid directly into the
Taboola auction. But in other cases,
especially for Taboola’s video formats,
DSP buyers must use a reselling supply
path to participate in the Taboola
auction.

What Are Proprietary
Placements?
Proprietary Placements are typicallyspecial formats like video interstitials,
full page skins, native content, oradhesion ad units. For either technicalor financial reasons, the vendors thatpower these special formats
commonly require exclusive right ofsale and full control over the addecisioning process. And thesecompanies often source DSP demandthrough reselling exchanges.

12Proprietary Placements
Those reselling supply chains look like this:DSP

Exchange

The DSP bids into an exchange. If the DSP wins the exchange’s auction, theexchange then forwards the bid to the Taboola auction where Taboola makes a final
ad serving decision.
In this example, bidding directly into the Taboola auction is simply not an option formany DSP buyers. Taboola owns exclusive sales rights for a scaled pool of video
inventory, and accessing this inventory requires reselling. In our view, this is value
added reselling that unlocks new inventory access for programmatic buyers.
Proprietary placements are widely adopted by most web publishers. Companies like
33Across, Connatix, Consumable, Duration Media, EX.CO, GumGum, Infolinks,
Insticator, Kargo, Minute Media, OpenWeb, Outbain, Primis, Taboola, Vidazoo andothers have exclusive right of sale for select placements on tens of thousands ofwebsites.

58% of the top 1,000 programmatically-traded websites haveat least one proprietary placement that is transacted throughauthorized resellers.
Programmatic buyers whose DSP does not have direct integrations with these ad
tech companies must use indirect supply chains to access this inventory.
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Rebroadcasting
The final variation of reselling is rebroadcasting. Unlike outsourced yield
management, content syndication, and proprietary placements, rebroadcasting leads
to an auction that does not have sales exclusivity.
We most commonly observe rebroadcasting for mobile app inventory, where thedominant source of publisher demand is specialized ad networks – companies like
InMobi, ironSource, and Smaato. These ad networks sell managed service
campaigns to advertisers but also supplement their hand-sold demand with indirectlysourced programmatic demand. From the perspective of a DSP buyer, the resulting
supply chain can look like this:DSP

Ad
Network

Exchange A

This supply chain is both financially indirect (the exchange and the network both takea fee) and technically indirect (there are two sequential auctions). There are also
longer multi-hop rebroadcasting supply chains:

DSP

Exchange B

Exchange A

Ad
Network

Selling through multi-hop supply chains is a proven monetization strategy. By creating
duplicate bid requests, rebroadcasting inflates the apparent size of a publisher,causing DSPs to submit more bids. Even after accounting for compounded supply
chain fees, publishers benefit from the added bid volume and resulting auction
pressure.

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Rebroadcasting
But rebroadcasting is highly unattractive to DSPs who are primarily burdened with theinfrastructure cost of processing duplicate auctions for the same impression andsecondarily burdened with the media cost of funding supply chain intermediaries. The
largest and best resourced DSPs solve this problem by integrating directly withmobile ad networks and other sell-side vendors that initiate rebroadcasting auctions:

DSP

Exchange B

Exchange A

Ad
Network

While rebroadcasting has been entirely eliminated by some
DSPs, most bidding systems continue to actively participate ininefficient multi-hop supply chains.
In today’s supply landscape, especiallyfor buyers who partner with scaled
DSPs that have robust sell-side
integrations, there is no value inrebroadcasting. Rebroadcasting’s onlyrole is to inflate publisher yield bycapturing irrational demand.
Marketers should be working closelywith their agency and DSP partners to
identify and block rebroadcasting
supply chains.

What Is
Rebroadcasting?
In all of our prior examples, theexchange submits the marketer’s bid
to a company that controls the final adserving decision. Rebroadcasting
represents cases where the DSP is
more than one “hop” away from thefinal ad serving decision.
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Optimizing Indirect
SupplyIn all of the examples above, marketers are purchasing indirect supply – impressions
that are sold by a company other than the publisher. Some of those indirect supply
paths are valuable. Others are wasteful.
To date, the industry’s discussion about reselling has been framed as a binary choice
for marketers – either enable reselling or disable reselling. But this framing is too
simplistic and is inconsistent with the ways programmatic marketers have been
optimizing supply for the past decade.

Marketers would never buy every publisher that lives behindan exchange, so why would they buy every intermediary?
Marketers need to reframe their supply strategies from a property-oriented lens to aseller-oriented lens. Property-oriented media planning makes a buy/no-buy decision
for a website like ESPN.com. Seller-oriented media planning recognizes that there are
two very different supply chains on ESPN.com:

DSP

Exchange

DSP

Exchange

ESPN inventory sold by Disney is a fundamentally different ad product from ESPN
inventory sold by Taboola. Buyers should primarily make decisions about whether totransact with Disney and Taboola, and should then secondarily make decisions about
which websites and apps to purchase from each seller.
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Optimizing Indirect
SupplyAn added benefit to seller-oriented media planning is a radical reduction in thecomplexity of supply management. There are over 1.5 million websites, mobile apps,
and CTV apps in the bidstream. But there are only 1,000 sellers. And 100 of thosesellers capture more than 80% of the average marketer’s budget.

The average programmatic buyer spends more than 80% of
its budget with fewer than 100 sellers.
Through seller-oriented media planning, buyers think less about maximizing
directness and think more about trading with trusted counterparties. The mostsuccessful media buyers now exclusively transact with 50-100 trusted publishers andintermediaries, unlocking three marketing benefits:
1.

Superior Business Outcomes
Trusted sellers – both publishers and intermediaries – provide maximally directaccess to ad products that change consumer behavior.

2.

Quality Control
Marketers who buy from vetted sellers can build familiarity with each seller’s adexperiences and apply human oversight to automated quality control systems

3.

Negotiating Leverage
Sellers reward buying power. The largest buyers get privileged inventory accessand preferred pricing. It’s better to be a large buyer with a few sellers than to bea small buyers with every seller.

Marketers who adopt a seller-oriented media plan should buy both direct and indirect
supply chains with confidence. Directness matters much less when marketers know
and trust their counterparty for every programmatic trade.

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Optimizing Indirect
SupplyActivating a seller-oriented media plan is ideally a DSP capability:

Buy-Side Activation
Media buyers should ask their DSP partners about seller reporting and seller
targeting. The most sophisticated DSPs now enable marketers to assess
campaign KPIs by seller (Disney, Taboola, etc.) Those DSPs additionallyallow marketers to make lists of sellers to include and exclude from eachcampaign. Marketers will quickly discover that their spend is already highly
concentrated to a short list of sellers and that pricing and performance vary
widely across those publishers and intermediaries.
But not every DSP supports seller-oriented media planning. Marketers whose DSP
partners do not yet have seller-based targeting and reporting capabilities should
instead collaborate with ad exchanges to curate inventory:

Sell-Side Activation
Every exchange is built to support seller reporting and targeting – sellers are
the exchange’s customer, and so of course exchanges can report and target
by seller. Through multi-seller deal IDs, buyers in any DSP can target a shortlist of trusted publishers and intermediaries. Buyers can continue to utilize
DSP capabilities for audience targeting, contextual targeting, frequency
capping, and bid price optimization. But the exchange puts guardrails on
which sellers are eligible to transact with the marketer.
Whether through buy-side or sell-side activation, responsible media buyers should
reorient their supply strategies around trusted sellers. Those sellers might operate
direct auctions, resold auctions, or even a combination of both. But marketers canbid with confidence knowing they exclusively transact with trusted counterparties.

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