July 23, 2019 - Sarah Sluis of AdExchanger writes: How does a smaller DSP survive, as the largest buying platforms command more of the marketplace? For Dstillery, the answer is to become a data company.
Dstillery officially shut down its bidder and stopped operating a DSP on July 1. Its focus now is selling custom audience segments through the buyer’s DSP of choice. Since its managed service business still accounts for the majority of Dstillery’s revenue, it runs client campaigns through a seat on an external DSP, often The Trade Desk.
But growth for the managed DSP business is stagnant, while the new business selling audience segments is growing at a compounded rate of 20% each month. Dstillery expects audience segment sales to contribute one-quarter to one-third of net revenue this year.
Over 800 customers have purchased Dstillery’s customer segments through their DSPs including The Trade Desk, Google Display & Video 360, MediaMath, Xandr, Adobe Audience Manager and TremorVideo DSP and the onboarder LiveRamp.
Reasons for changing
The transition from DSP to data company started almost two years ago, and Dstillery claims it’s now stronger than ever.
DSP technology was becoming increasingly commoditized, yet required continued investments to connect new inventory sources, improve the supply chain and add features. For a large DSP, those costs are spread out across a huge customer base. For a smaller DSP like Dstillery, those costs added up, and it saw the writing on the wall.
“Those with scale will ultimately win,” said CEO Michael Beebe [pictured], who joined midway through this transition in August 2018. “Putting more dollars and capital infrastructure into managing an undifferentiated technical platform was unlikely to generate ROI.” More...