DSPs are pivotal in programmatic advertising
Demand-side platforms (DSPs) play a central role in programmatic advertising. They decide which inventory to bid on, interpret supply-side platform (SSP) signals, and optimize bidding based on past performance. That’s a lot of influence. But control? Not really. The shift to an ID-less future won’t happen just because DSPs decide it should.
Advertisers set budgets, define key performance indicators, and establish brand safety rules. Publishers package inventory and control pricing. Tech providers design the tools that make all of this possible. The industry operates as an interconnected system, and no single player dictates the rules. The move away from third-party identifiers, cookies and device IDs, requires broad, synchronized effort. If any one part of the chain resists, progress slows.
Take the IAB Tech Lab’s new instream video standard. DSPs have been slow to adopt it, forcing SSPs to keep supporting outdated standards. That’s inefficiency at scale. The same issue applies to ID-less inventory. If DSPs don’t move forward, neither do advertisers. And if advertisers hesitate, publishers won’t shift their strategies either.
The industry’s dependence on third-party identifiers
DSPs operate on data. Their algorithms optimize based on what has worked before, and for years, that meant relying on third-party identifiers. It’s efficient, until those identifiers disappear.
Here’s the problem: DSPs allocate budgets to inventory that has historically delivered results. That means ID-based inventory gets the majority of ad spend. Meanwhile, ID-less inventory struggles to prove its effectiveness because there isn’t enough historical data to justify higher investment.
“This creates a loop, without data, there’s no optimization. Without optimization, there’s no spending. Without spending, there’s no data.”
Even worse, DSPs impose QPS (queries per second) limits, which filter out bid requests that lack identifiers. SSPs, in response, prioritize inventory with IDs because it’s more likely to generate revenue. This means fewer opportunities for ID-less solutions to gain traction. The system reinforces itself.
Executives should recognize this pattern and look beyond short-term performance metrics. Breaking the cycle requires investment in ID-less measurement and optimization strategies, even before the data proves itself. Otherwise, the industry will remain locked into a reliance on IDs until regulators or browsers force the issue.
Transitioning to ID-less solutions is complex
Shifting away from third-party identifiers means rewriting the infrastructure of digital advertising. That’s why so many companies are hesitating.
Technical debt is a major barrier. Many advertisers, DSPs, and publishers are running on systems built for ID-based targeting. Overhauling these systems isn’t cheap or easy. It requires new measurement frameworks, new bidding models, and new ways to verify campaign performance. At the same time, privacy regulations are shifting, making it harder to predict which technologies will be compliant in the long term.
The hesitation is understandable. But waiting too long creates a different risk: obsolescence. If ID-less solutions don’t mature fast enough, the industry will consolidate around a few dominant players with the resources to adapt. That’s not a good outcome for competition.
Tony Katsur, CEO of IAB Tech Lab, sees the solution in cohort-based approaches. He predicts that over the next five to seven years, advertisers will rely on audience groups rather than individual tracking, using single identifiers applied to large consumer segments. That shift is coming. The question is whether companies will proactively invest in the transition or be forced into it later under less favorable conditions.
The lack of standardized measurement
“Advertisers don’t spend where they can’t measure results. Right now, ID-based targeting offers clear performance metrics, while ID-less solutions don’t have universal benchmarks.”
Without standard measurement frameworks, agencies and brands will always lean toward the familiar. If you can prove that an ID-based campaign drove conversions, but ID-less alternatives come with uncertain reporting, the decision is obvious. But this hesitation slows progress. The industry won’t move forward until advertisers trust the metrics.
The priority should be pushing for transparency and consistency in ID-less measurement. Publishers, advertisers, and industry groups need to work together to establish reliable, scalable performance benchmarks. Without that, ID-less advertising will remain an experimental budget line rather than a mainstream strategy.
Rebuilding trust between buyers and sellers
Advertising runs on data, but data is only valuable if both sides trust it. Right now, that trust is fragile.
Buyers rely on DSPs to evaluate audience signals, but privacy concerns prevent sellers from sharing too much. Advertisers want proof that they’re reaching valuable audiences, but publishers can’t always disclose the full picture without violating privacy policies. That tension is holding back ID-less adoption.
One potential solution is restructuring relationships. Instead of relying solely on DSP-driven audience targeting, buyers could work more directly with premium media owners and SSPs. If trust is built at the source, strict DSP media requirements become less relevant. Advertisers would be more willing to accept alternative signals if they knew they came from verified, high-quality sources.
Transparency matters. The companies that establish themselves as trustworthy data providers, whether on the buy or sell side, will have the most leverage.
Industry-wide collaboration is the only way forward
The shift to ID-less advertising won’t happen through isolated efforts. It requires coordinated action.
DSPs must support ID-less inventory more aggressively. Advertisers need to demand clear performance benchmarks. SSPs and publishers must refine their seller signals. Industry bodies must develop frameworks that bring transparency and reliability. None of this can happen in a vacuum.
Education is just as important. Many marketers and advertisers still lack the knowledge to execute ID-less strategies effectively. Until best practices are widely shared, demand for these solutions will remain low. That’s a problem, because without demand, innovation stalls.
Perhaps most importantly, the future of identity solutions must be open. If the next wave of ad tech is designed only for companies with deep resources, the market will consolidate, excluding smaller players. That’s the opposite of progress.
Key executive takeaways
- DSPs alone can’t drive ID-less adoption: The transition away from third-party identifiers requires alignment across advertisers, publishers, and tech providers. Leaders should push for collaborative industry-wide adoption rather than relying on DSPs to dictate the shift.
- Breaking the third-party data dependence loop: DSPs favor ID-based inventory due to historical performance data, reinforcing reliance on third-party identifiers. Executives should invest in ID-less measurement frameworks now to avoid being locked into outdated targeting models.
- Legacy systems and hesitation are slowing progress: Many companies resist change due to technical debt and financial constraints, but delaying modernization risks long-term market disadvantage. Decision-makers should evaluate ID-less solutions as a strategic necessity, not a compliance burden.
- Lack of measurement standards is a major roadblock: Advertisers prioritize clear performance metrics, but ID-less solutions lack universal benchmarks. Industry leaders must advocate for standardized measurement frameworks to accelerate adoption and reduce risk aversion.
- Trust gaps between buyers and sellers must be fixed: Advertisers want transparency, but privacy rules limit what publishers can disclose. Strengthening direct relationships with trusted media partners can improve data confidence and reduce reliance on DSP-driven audience signals.
- Industry-wide collaboration is the only viable path forward: The shift to ID-less advertising requires joint action from DSPs, advertisers, publishers, and regulators. Executives should engage in industry consortia and drive education efforts to ensure their teams are prepared for the evolving ad ecosystem.
