Digital Gabe
Cutting Edge Commentary On All Things Media

Danger In DSP Land

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Unless you’re really in the weeds in the AdTech space, you may have missed last week’s news that the demand side platform Sizmek filed for bankruptcy protection.  While there’s still a chance Sizmek can emerge as a reorganized company, their bankruptcy has sent a shiver up digital media’s collective spine.

The problem with a DSP going bankrupt is that it won’t be able pay vendors further down the supply chain, including SSPs and publishers.  There’s a very tight interconnection between these parties, which starts with the DSP using a client’s budget to pay for impressions it pulls in.  So if a DSP can’t pay its bills there’s chance a partner SSP won’t have the cash to meet its obligations either, which could set up a wicked domino chain in the AdTech space.

The silver lining in this situation is Sizmek’s relatively small size.  Since they’re not one of the bigger DSPs it’s unlikely their bankruptcy will put anyone else out of business.  However, if one of the bigger guys like The Trade Desk or Media Math ever defaulted all hell could break loose in the SSP and publisher communities.  This situation really underscores the fragility of the AdTech landscape we’ve all become so dependent on.

 

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