We’ve spoken at length about how our industry continues to evolve and how it is becoming increasingly efficient with each passing year.
While a more efficient market sounds like a good thing, and indeed has many benefits, the downside is the ensuing consolidation.
As we saw when IgnitionOne shut down in 2019, greater efficiency in programmatic advertising solutions means that more than a few competitors will end up crowded out of a changing ecosystem.
In mid-January 2021 we learned that demand side platform (DSP) PocketMath appears to be another such casualty.
PocketMath bills itself as a global leading provider of mobile demand-side platform (DSP) and programmatic advertising solutions. (Check out our article on what is a DSP for the basics on how these work.)
Founded in 2011, PocketMath started to show signs of trouble last fall when it slowed down payments due to cash flow concerns.
At that time, PocketMath was said to be positioning itself for a possible sale.
Ultimately, no acquisition occurred and all signs point to the company ceasing operations entirely in early 2021.
How does a longtime fixture in the industry go south? We can’t speak to the particulars of PocketMath’s situation, but again it’s about efficiency.
Advancements in auctions, bidding and supply optimization that make things run more smoothly also mean we need fewer DSPs (or SSPs).
Again, we can’t comment on PocketMath’s financial situation but as this efficiency in the market crowds out and increases competition between these ad partners, some of their profits will decline considerably.
If you’ve got a subscription to Business Insider, you can read its take on PocketMath’s alleged shuttering, complete with insight from Mediavine CEO Eric Hochberger.
The bad news — and the reason we’re talking about this — is that even as DSPs flirt with bankruptcy and exit strategies, they continue buying impressions through ad exchanges, potentially leaving publishers on the hook.
It’s a safe bet that the exchanges, and the companies that buy on them, will not see any money owed to them from PocketMath.
Assuming that’s the case, it will likely leave a financial burden behind for SSPs to clean up and in many of these cases, their next move will be to “claw back” earnings from publishing partners like Mediavine.
You see the domino effect. Publishers (in this example Mediavine) then take this money back from the websites they manage, leaving those with the least responsibility and no recourse footing the bill.
Fortunately, Mediavine doesn’t do that and here’s why.
Ultimately, we have always viewed Mediavine’s relationship with various exchanges and DSPs as our responsibility, not our clients’.
Failures of companies such as Sizmek, Defy Media, YieldBot, IgnitionOne, PocketMath and others should not be your concern.
Since, sadly, we believe this situation will only repeat itself more often in the coming years, we developed BidShield® in 2020.
BidShield protects the 7,600-plus publishers who depend on us from ever seeing an interruption of payments or decline in revenue if, and when, DSPs go south, allowing Mediavine to maintain our industry-leading revenue shares and eCPMs.
This proprietary technology was created to mitigate risks like these and guard against clawbacks, delayed payments, bankruptcies and more.
For the full explanation of how it works, follow the link above. The shorter version is that BidShield determines the risk factor of bids received in our auctions, weights their bids accordingly and pools a portion of those bids into a rainy day fund of sorts, until we’re sure there aren’t clawbacks.
Once we’re sure there are no clawbacks, we issue any unused funds back to the publisher in the form of a credit. This is all done with full transparency.
TL;DR version: You will always be paid and paid on time.
Period. No clawbacks now — or ever. What our Dashboard says is what you get and that will be the case as long as you’re with Mediavine.
This is the Mediavine Guarantee. We’ve solved for this problem instead of passing the buck because that’s what we do.
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Eric Hochberger
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