The Trade Desk Doubles Down on the Open Internet with its New Solimar DSP

July 15, 2021

DELVE prides itself on being a trusted advisor to top brands because we select the right technology to solve specific business problems. As a technology-agnostic digital consultancy, we help brands select, deploy and optimize a variety of AdTech stacks and data lake solutions to deepen insights and improve paid media performance, including Google’s Display & Video 360, Amazon DSP and The Trade Desk (TTD).

So we were intrigued when TTD recently announced the launch of the newest iteration of its DSP, named Solimar (for Sol y Mar—where sun and sea meet).

We at DELVE support the philosophy behind Solimar, as it aligns with our focus on data-driven advertising. Solimar, in our opinion, represents the “right” evolution of the industry, because of two factors:

Because we are technology agnostic, we make sure that the brands we partner with are aware of all recent innovations in the industry. However, we want to be clear that we are—and will continue to be—big supporters of leading DSPs such as Display & Video 360 and Amazon DSP in addition to TTD’s Solimar. 

DELVE’s summary of The Trade Desk’s Solimar presentation from July 8, 2021 appears below, with additional DELVE commentary added. Please note that while TTD’s views may or may not align with those of DELVE, we did not redact TTD’s key messages.

Forces Impacting/Shaping the Digital Marketing Industry

As the economy continues to recover from the effects of the COVID-19 pandemic, according to TTD, we in the ad industry are finding ourselves in a very different world than where we were a year and a half ago. 

Marketers need to update their strategies. Big Tech is bigger than ever—with Google, Facebook and Amazon alone taking in 64.4% of ad market share—and it’s also under more scrutiny than ever from governments and digital-savvy consumers, all calling for digital privacy and giving the individual more control over their data. At the same time, Big Tech has figured out how to bend the privacy trend to their advantage. Google has delayed third-party cookie deprecation in Chrome until it’s prepared to roll out FLoC, which, if adopted widely across the industry, could put Google in a position to “own” identity. Apple’s App Tracking Transparency measures seem to be an attempt to kneecap independent AdTech platforms.

Another key change at work is just how many eyeballs have shifted to CTV. Consumers had to keep themselves entertained at home during the pandemic (but at the same time, the cord-cutting trend accelerated as people looked for ways to save money). CTV is an incredibly powerful and effective advertising channel, with ample data to aid in personalization. And the dollars are rolling in: Premium video is poised to represent over 50% of the $1 trillion global ad market, and no one company is in a position to dominate that market. (Netflix commands only about 11% of all screen time.) It’s actually in the best interest of the walled gardens to keep advertising democratic in CTV. 

Retail marketers are under more pressure than ever to do more with less data. During the pandemic, with businesses sweating to cut costs without laying off employees, that pressure came from the corner office. Today, Big Tech’s motions increase the pressure by essentially removing third-party cookies from the future equation. While it may be tempting to wait for direction from on high, the way to take advantage of this moment is to speak up, clarify your business goals, understand the data insights you’ll need, and start creating solutions using the tools you and your partners have. 

The way brands and marketers will win in the open internet is by putting their own first-party data to use at the forefront of marketing strategy for relevant targeting, personalized messaging and analytics. This reduces poor targeting and wasted spend that comes from relying heavily on impossible-to-verify third-party data. First-party data allows marketers to create their own intent signals to use in targeting, and provides a clearer understanding of consumer acquisition and retention. And data-driven analytics uncovers new opportunities for efficiency and growth, while allowing the brand to shift spend to where it is most effective, eliminate wasted spend, and grow the business’s overall revenue.

DELVE spent considerable time after the COVID-19 outbreak helping brands refine their media strategies to “buy smart, not more” and eliminate waste. Also key was applying first-party data to personalize and align ad creative with consumer psychographics and motivators, helping to improve conversion rates (and thus, return on ad spend). As we emerge from COVID-19, the same data-driven optimization techniques apply.

How is the Internet Going to Pay for Itself? Can it be Owned?

For the internet (and ultimately media) to be independent from any one company’s control, it needs to be able to pay for itself. High-quality media costs money to produce, but consumers are accustomed to getting it cheap, or free, in digital. Advertising is central to the quid pro quo of the open internet, and as an industry we need to make sure it’s sustainable and provides a positive user experience.

According to Jeff Green, CEO of The Trade Desk, there are essentially two kinds of companies in digital: those trying to control the internet, and those trying to enable it. AdTech, in particular, is highly competitive: One company after another has tried to grab more market share, hoard its data, and shroud its methods in opacity whenever it gets a piece of the pie to keep the competition from biting into it. The Trade Desk launched UID 1.0 in part as a reaction to that tendency, not meant to be any one company’s “secret sauce.” 

The Future of Identity

The Trade Desk built UID 2.0 to unify the industry toward democratization, instead of consolidation. To consider it a “cookie replacement” would be a misnomer, and to position it as the sole future currency of digital would be irresponsible. The open internet could very well be served by a different identity solution, or by several solutions. If an identity solution is widely adopted, it can withstand any related curveballs Big Tech throws. A sustainable internet calls for a solution more powerful than third-party cookies. It has to be a solution that addresses CTV, and that works across browsers and devices.

It’s also essential to think about the quid pro quo in terms of the relationship between a) media companies that own engaging content and b) consumers. Walled gardens might oversee and distribute content, but they can’t be allowed to control the media owner/consumer relationship. They shouldn’t hoard consumer data that can help media owners move into the future of identity. Data hoarding, for a walled garden, is ultimately futile. No closed ecosystem can control all of digital.

Introducing Solimar DSP 

The Solimar DSP was built to improve key marketing functionalities—measurement, data management and onboarding, and a clear view of signals and insights that enable good marketing decisions—while simplifying the supply chain.

The Solimar Measurement Marketplace was designed to counter walled gardens’ tendency to grade their own homework. Walled gardens may promise simplicity and more efficient management of the supply chain. The downside is that walled gardens require marketers and media buyers to share their first-party data, then limit the insights they share back in reporting. Marketers need to be able to choose what and how they measure performance, which walled gardens don’t feel incentivized to allow.

Solimar starts with efficient onboarding, similar to how Facebook Ads works. Next, the platform allows marketers to set goals and define success by defining and prioritizing their KPIs. That helps inform AI and machine learning. 

Solimar needed to address the inefficiencies in planning, as the industry knows it. Solimar’s planning tool needed to enable data-driven reallocation of spend throughout the campaign, so media buyers aren’t chained to their initial plans and separated from the data they need to optimize spend. 

The next key function in this process is Koa™, Solimar’s AI tool. With the Koa tool, Solimar allows media buyers to automate decisions with a high degree of accuracy, allowing them to focus on decisions best made by humans—intuitive or hypothetical thinking—and enabling campaigns to be better informed by combined human/machine choices.  

Solimar also needed to simplify the supply chain, to give the open internet a similar advantage to walled gardens’ supply chain management. It incorporates ads.txt, sellers.json, and Supply Chain Object for auditing of the entire supply chain, and it adds the Global Placement ID and Supply.api. Global Placement ID allows sell-side stakeholders to supply metadata about ad placements in order to facilitate good media-buying decisions. And Supply.api is a new TTD API that displays where its platform is buying from—a counterpart to how publishers use ads.txt.

The goal here is to make the digital ad business more competitive, and to encourage stakeholders to add more value to the ecosystem than they take away in fees.

Advertiser Perspectives

Advertisers weighed in on TTD’s live event announcement and the vision cast by CEO Jeff Green.

Brands need data insights that improve media effectiveness to grow their business. Part of how that happens is by marketers and media buyers shifting their focus from cost to value. Focusing heavily on ad cost dilutes a brand’s ability to reach new consumers and grow customer lifetime value. Brands should reverse that thinking: Start with your KPIs and work backward to start meeting the challenge of correlating viewable impressions to business outcomes. 

Programmatic media is no longer about buying more impressions at a lower cost. It’s about reaching your consumers in a high-quality and trustworthy environment. Advertising in a premium environment is more effective, in part because it flips the discussion from ROI to media-generated revenue. Chasing cheap GPRs can be counterproductive: Brands need to understand whether they’re getting better reach, or just increasing frequency to the same households. Look instead at first-party data to reveal where your highest-value audiences are. First-party data allows you to personalize advertising, and to get closer to your goals with fewer overall impressions.

In essence, programmatic is about enabling data-driven decisions, rather than relying on guesswork. But if we are to remove the uncertainties and the dead ends in the buying process, the industry needs to make the future of identity more reliable and efficient than the old third-party cookie model. Third-party data is often wrong—wrong about the consumer’s age, location, income level and other characteristics. A look at the data profile any third-party data provider has created for you will show inaccuracies. As brands take this moment to reassess their data strategies, they’ll need to think about the signals they need to meet their goals, beyond mere incremental reach.

At DELVE, we are excited to hear brand advertising leaders recognize the distinction between effort (buying cheap ad inventory) and outcomes (converting ads to revenue) because our consultancy model is built upon measurement-first advertising. Driving business outcomes is why brands invest in advertising, so taking a myopic view of simply “buying cheap” (ad inventory) at scale fails to focus on what matters: revenue growth. This is why we apply advanced data science techniques to programmatic media to identify high-value, high-conversion audiences and orchestrate next best product sequences to grow lifetime value (LTV) while improving return on ad spend (ROAS).

Here are some additional guidelines marketers should keep in mind:

Relevant advertising, more accurate targeting, and the ability to process and understand data are all key to sustaining the open internet and the value it brings: premium content and seamless ad/content experiences for users, well-monetized inventory for media owners, and campaign success (and long-term customer value) for advertisers. With Solimar, TTD aims to support all sides of that triangle without consolidating control among a small clutch of powerful stakeholders.

Closing Thoughts from DELVE

While time will tell how the industry embraces The Trade Desk’s approach to identity resolution and DSP technology, here at DELVE we believe TTD’s vision for an open internet, and results-focused programmatic ad strategies that are driven by first-party data, is the right direction for the industry. 

Because DELVE is a technology-agnostic digital consultancy, we believe that any programmatic advertising effort should comprise several DSPs that complement each other. We find again and again that a multi-DSP programmatic advertising program, with ad serving and cross-DSP attribution enabled by solutions such as Google’s Campaign Manager 360, Amazon DSP, and now TTD’s Solimar, provides higher ROAS and the ability to cleanly delineate between prospecting and retargeting programmatic efforts.

Want to fast-track your first-party data strategy and drive real ROAS gains in programmatic advertising? Get in touch with the DELVE team today.

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