Curation and the Media Decisioning Power Dynamic

The following information was originally presented by Scott Messer of Messer Media at the AdMonsters #PubForum in Boston on August 5th, 2024.

Curation is taking over the mainstage, but why is it such a big deal?

In short, Curation Houses are aggregating a fragmented landscape and putting checks directly into publisher's pockets along the way. Let's take a look at how they are doing that, and how this may impact the Media Decisioning Power Dynamic.

For those of you wondering if Curation is the same as ad networks, or the stuff that SSPs have already been doing...well it's more...

Curation, specifically this new style that some call Supply-Side Curation, is most typically when a 3rd party vendor (Curation House)packages audiences and media together within an SSP (Curation Platform) for a buyer to purchase via deal-IDs. The Curation House neither owns nor operates this media, but does often work in cooperation with a publisher to better develop audience cohorts and gain access to premium inventory.

Here's a simple look at the advantages of a publisher using Curation as a part of their monetization stack. Yes, you can go full YOLO into curation, but it's not ready for prime time like that, yet. Rather, publishers should use the below table to help discern where and how to make longer term investments. Do you really need a DMP if you don't have a direct sales team?

I am not arguing that publishers should totally abandon their myriad efforts to create differentiation that helps drive demand. Rather, I am demonstrating how Curation should be a part of yield diversification efforts for publishers, and that DCaaS is a market correcting force that helps both buyers and sellers.

Okay, so what?

Deal curation as a service (DCaaS) is shifting the balance of power away from DSPs and back towards the supply side.

That's a big deal because publishers have been disintermediated from revenue sources, and their supply is regarded as a bulk, undifferentiated commodities. The further a publisher is from controlling their revenue fate, the more likely they are to engage in market-eroding behaviors to gain an advantage. Likewise, SSPs have difficulty creating differentiation and get lumped into the "so what" bucket of AdTech. As we will see later, DCaaS helps correct some of that imbalance.

Forces of Nature: The Media Decisioning Power Dynamic

As buyers and sellers look for scale and efficiency to liquidate inventory across digital media, we can plot the relative importance of 3rd party cookies and packaged audiences vs. who is curating the media.

Understanding the Dynamic:

1. When publishers and SSPs are "curating" media... Audiences and 3P cookies are pretty important, but they have many other tools like context.
2. When agencies curate media (either through direct deals or PMPs), Audiences are very important, but they don't really care much about cookies.
3. When DSPs curate media, audiences are not important, but 3P cookies (aka signals) are very important to help triangulate performance and KPIs.

The importance of packaged audiences and 3rd parties cookies are relative to who is curating the media curator, and create a dynamic tension for the publisher.

On the left side of the graph, publishers are in control, and on the far right they are not.

Publishers are all too aware of how programmatic media buying changed the dynamics of media relationships. While open auctions brought liquidity to the markets, they swung the balance of power far away from publishers.

When DSPs are fully in charge of media buying, Publisher Power & Influence decreases.

The Savior of Curation

Curation focuses on selling audiences to buyers and optimizing for outcomes. In order to make better audiences, curation houses need relationships with publishers and are incentivized to compensate them fairly for cooperation.

Their cooperation with publishers and utilization of SSPs as the curation platform pulls the "decision engine" away from cookie-gobbling DSPs and elevates the publisher's role in the supply chain.

Further, curation houses often transact through IOs and managed campaigns and are responsible for media quality, which means publishers need to be on their best behavior if they want to maintain good standing to receive this demand. By properly aligning their incentives, publishers are motivated to eschew market-eroding behaviors like high refresh rates, MFA designations, low viewability and more.

To better illustrate how the decision engine moves with Curation, let's look at a simplified supply chain:

Above, DSPs have the majority of decisioning power and can maximize margin extraction. We know this story very well.

Below, we see where curation houses not only extract margin, but also share margin and data licensing revenue with the publisher. This demand re-routing role is critical to Curation reshaping the power dynamic.

Curators are on the hook to perform for both of their client classes: marketers and publishers. They must drive performant outcomes for marketers, and they must demonstrably drive revenue into publisher pockets. Their dual role helps restore a balance in the media ecosystem.

Speaking of performance, it is critical to understand that curation houses are selling on their ability to perform. If they want to usurp the decision engine from DSPs and command larger shares of budget, they must deliver ROI. Curation within agencies has been happening for sometime, but they lost much of that power when DSPs showed up with "just let the algorithms do the work" mantras. Media agencies have the opportunity to reclaim the throne of media planning by hiring curation houses, or perhaps acquiring/building their own Curation Desks.

Below is a clean version of the Media Decisioning Power Dynamic.

Thank you for stopping by! I know I skipped some steps and there are a few key areas worth exploring here... what do you think?!

Bonus Content

For the publishers out there, here is a short checklist of questions when discussing DCaaS with those claiming to do curation. Make sure that the partners are adding value to your chain, and aren't just simply reselling your inventory.