When DSPs and SSPs Converge

The rise of unified advertising platforms and the reshaping of the programmatic supply chain

By Karsten Weide, Chief Analyst

The programmatic advertising ecosystem is undergoing one of its most consequential transformations since its inception. The long-standing separation between demand-side platforms (DSPs) and supply-side platforms (SSPs) is breaking down. DSPs are building direct publisher integrations that bypass SSPs, while SSPs are launching buying tools that bypass DSPs. What began as incremental feature expansion is evolving into a structural reorganization of how digital advertising is transacted.

Unified advertising platforms (UAPs) are starting to take shape as AdTech companies bring demand- and supply-side capabilities together into a single system that serves both buyers and sellers. What’s driving this shift, where it stands today, and what it means for advertisers, publishers, and the broader ecosystem are all coming into clearer focus. At the same time, AI is accelerating the trend, pushing the industry toward a very different end-state — one where the market shrinks from hundreds of intermediaries to perhaps just a dozen global transaction platforms.

At the core lies a fundamental question: Will UAPs create a more efficient and transparent ecosystem, or will they replicate the concentration of power seen in today’s walled gardens?

Defining the DSP-SSP Convergence

For decades, programmatic advertising operated through a clear division of labor. Advertisers used DSPs to plan and execute campaigns, while publishers relied on SSPs to manage inventory and maximize yield. Exchanges facilitated auctions between the two. This multi-layered supply chain introduced significant inefficiencies, with cumulative fees often exceeding 40% of advertiser spend.

Convergence represents the collapse of this structure. DSPs like The Trade Desk now connect directly with publishers through integrations such as OpenPath, bypassing SSPs. Conversely, SSPs like Magnite and PubMatic offer tools like ClearLine and Activate, respectively, allowing buyers to transact directly without DSPs.

The logical endpoint is the UAP: a platform that manages audience targeting, bidding, and optimization for buyers while simultaneously handling inventory management, yield optimization, and data activation for publishers. Unlike walled gardens, UAPs operate across the open internet, at least in principle maintaining interoperability.

How Real Is the Convergence?

The shift toward UAPs is still in its early stages, but it is unmistakably real.

On the demand side, The Trade Desk’s OpenPath has become a leading example. By charging a low at-cost fee while eliminating SSP intermediaries, it has redirected significant spend through direct publisher connections. Publishers such as Vizio have reported meaningful improvements in revenue and fill rates as a result.

The Trade Desk, pioneering the optimization of the supply chain

Other DSPs are following suit. Yahoo’s Backstage initiative and Amazon’s Publisher Direct product reflect similar efforts to establish direct supply relationships.

On the supply side, SSPs are moving aggressively into buying. PubMatic’s Activate enables direct campaign execution, with early results showing lower CPMs and higher performance. Magnite’s ClearLine provides agencies direct access to premium video and CTV inventory without DSP involvement. More than half of PubMatic’s revenue now flows through direct agency relationships, underscoring how far SSPs have expanded into demand-side territory.

Convergence is most advanced in CTV and premium video, where inventory is scarce and valuable, and in programmatic guaranteed deals. In open RTB display, the traditional model still dominates, though the number of intermediaries is declining.

Why the Convergence Is Happening

Four forces are driving this transformation.

First, competitive pressure from walled gardens continues to intensify. Google, Meta, and Amazon offer simplicity, scale, and integrated capabilities that independent adtech vendors struggle to match. As independents compete for a shrinking share of the market, they are expanding horizontally into each other’s domains.

Second, the industry is under pressure to reduce the “adtech tax.” Supply path optimization was an initial response, but convergence goes further by eliminating intermediaries altogether. Direct transactions reduce fees and increase the share of spend reaching working media.

Third, privacy changes and signal loss are forcing tighter data integration. With cookies disappearing and mobile identifiers restricted, platforms need direct access to both advertiser and publisher data. UAPs enable closed-loop data activation, matching first-party data on both sides in privacy-safe environments.

Fourth, the growth of CTV and retail media is accelerating convergence. These channels are high-value and data-rich, favoring platforms that can integrate targeting, measurement, and execution within a single system.

What Convergence Means for Advertisers

For advertisers and agencies, convergence offers clear benefits. It reduces operational complexity, streamlines supply paths, improves targeting in a privacy-constrained environment, and lowers costs. It also democratizes access to premium inventory, allowing smaller buyers to participate in markets previously dominated by large agencies.

However, these benefits come with risks. A platform that represents both buyer and seller introduces inherent conflicts of interest. When the same entity runs the auction, sets pricing, and reports performance, independent validation becomes difficult.

There is also a growing dependency risk. As the market consolidates around fewer platforms, advertisers lose negotiating leverage and become more exposed to single points of failure.

The strategic response is to balance efficiency with independence: leverage UAP capabilities while maintaining diversified platform relationships, demanding transparency, and investing in first-party data assets.

What Convergence Means for Publishers

Publishers also stand to gain from convergence. Direct integrations can increase revenue yield by reducing intermediary fees, while data partnerships create new monetization opportunities. UAPs can simplify the technology stack, enabling unified management of programmatic guaranteed and open-market inventory.

Yet, the risks are significant. As DSP-direct buying becomes dominant, publishers might become dependent on a smaller set of platforms. Reduced competition among intermediaries can weaken yield optimization. Moreover, UAPs possess superior market intelligence, giving them an advantage in negotiations.

To mitigate these risks, publishers must maintain multiple demand paths and carefully manage data-sharing agreements to preserve control and leverage.

The UAP Power Shift

The emergence of UAPs fundamentally alters the balance of power in the ecosystem. Platforms that control demand, supply, data, and identity gain powerful network effects. The more participants they connect, the more valuable they become.

This raises an uncomfortable question: Do UAPs become the new walled gardens?

The parallels are clear. Both models centralize control over transactions, data, and measurement. Both create opportunities for self-preferencing. While UAPs operate on the open internet today, the incentives to close ecosystems increase as they scale.

The conflict-of-interest issue is structural. A platform representing both buyers and sellers must balance competing interests, a dynamic already central to antitrust scrutiny in adtech.

Independent vendors’ challenge is to capture the efficiency gains of convergence without sacrificing transparency and competition.

How AI Advertising Agents Will Change the Picture

Agentic AI is accelerating this transformation. Autonomous systems are getting closer to managing campaign execution end-to-end, from creative generation to optimization and budget allocation.

These systems perform best in environments with maximum data access and minimal friction, making UAPs a natural fit. Integrated platforms provide the data density and operational continuity that AI requires, creating a powerful feedback loop: More data enables better AI, which drives better performance, attracting more users and generating more data.

At the same time, AI introduces new uncertainties. If execution becomes fully automated, platforms risk becoming commoditized infrastructure. Interoperability standards could allow AI agents to operate across platforms, limiting consolidation. And accountability for AI-driven decisions remains an open question.

The End-State: A Consolidated Market

The programmatic ecosystem is consolidating. The once-crowded LUMAscape is giving way to a more concentrated structure.

The likely end-state consists of three tiers. At the top are walled gardens — Google, Meta, and Amazon — which dominate through closed ecosystems. Beneath them are a handful of UAPs, combining demand- and supply-side capabilities to compete for open-internet transactions. And below them are specialized niche players serving specific formats, geographies, or functions.

The industry is likely to shrink to roughly 10–15 global transaction platforms. This structure will be more efficient and data-driven, but it will also test the foundational principles of the open internet.

Conclusion

The convergence of DSPs and SSPs marks a fundamental restructuring of programmatic advertising. Driven by economic pressure, privacy changes, the rise of CTV, and the demands of AI, UAPs are emerging as the dominant model for the next phase of the industry.

They promise meaningful gains in efficiency, data activation, and performance. But they also introduce new risks around concentration, conflicts of interest, and the erosion of transparency.

For all stakeholders, the imperative is clear: Embrace the benefits of convergence while preserving the competitive dynamics that sustain a healthy ecosystem. Advertisers must diversify and invest in data independence. Publishers must maintain multiple demand relationships. Platforms must prioritize transparency. And regulators must remain vigilant as dual-sided platforms reshape the market.

The future of the open internet will depend on how these trade-offs are managed in the years ahead. 

This post is an excerpt of W Media Research’s research note “When DSPs and SSPs Converge – The Rise Of Unified Advertising Platforms And The Reshaping Of The Programmatic Supply Chain,” 5 pages, US$500. This note was first published on Marketecture.