White-labeling – or using ready-made software products that can be rebranded, rather than creating them from scratch – has become a trend in advertising. Tatyana Slyvkin, CEO of BidPulse, offers insights on white labeling’s potential growth in the ad tech arena.
White Label Tech: A Decent Alternative to In-house Solutions?
A white label ad exchange is usually acquired by ad networks, SSPs, DSPs, and other players who buy/sell and manage traffic and want to have their platform without the associated costs that come with developing the software from scratch. As a result, the company increases its market credibility without heavily investing in the development process. Something that, until now, only large market players were able to do.
In 2020, the ad tech market was experiencing significant changes due to the pandemic outbreak that brought some extra complications to the table. As a result, the rise of programmatic digital advertising was followed by some critical challenges. Price transparency has decreased, which is mainly caused by the automatization of the trading media. Consequently, the issue has prompted many companies to invest in in-house product development.
In those days, just as today, not all businesses had sufficient resources to build their technology products and resolve business needs with top-notch tech. Here is where white labeling came in handy. The first attempts to use white solutions in advertising occurred nearly ten years ago, but now they have confidently entered the market and stirred up the industry.
White Technologies Trend in 2021
In 2021, the trend on white-label ad tech solutions has become influential primarily due to the pandemic. The current crisis complicates the conditions for smaller businesses that often have no resources to build and operate in-house solutions. However, they had no problem finding resources to become more independent and secure. Unlike big enterprises, smaller companies needed a flexible model that could be equally reliable but more time-efficient and without the high price tag.
Nowadays, the white label approach seems beneficial for small and large companies alike. However, larger companies have also begun resorting to white-label solutions to enhance their advertising capabilities and speed up processes at a relatively low cost.
The development of white-label technologies is not just a consequence of the pandemic but also the industry’s attempt to deal with restrictions introduced by giant corporations like Google, Facebook, and Apple that turned the ad tech industry upside down. In addition, the cookies phase-out and IDFA removal hastened the need for new solutions. Hence, in 2021, the active search for independent approaches to programmatic advertising has only fostered the growth of white-labeling in ad tech.
White-Label Tech in 2022: Benefits and Drawbacks
The trend has taken roots in the industry and keeps growing at a frantic pace. Making a seven-league step into 2022, we can expect its further development in ad tech.
The main advantage is that white-label solution buyers will entrust product development to professional teams and won’t spend extra resources on talent acquisition, building a dedicated team, and process management. But, of course, the control in this matter is relative and strongly depends on the relationship between the provider and the solution buyer. Ideally, companies can shift the development process to the solution provider and engage in vital business development tasks, a win-win for all.
At this point, one can strongly agree with a financial adviser and Head of Customer in Seccl Dan Marsh, who concludes the following in his investigation for FT Adviser: “Thanks to new technology, firms of all shapes and sizes have a new and exciting opportunity to control their destiny. Whether they choose to operate their own platform is up to them….”
A potential risk of white-labeling named by some legal experts is an opportunity to shade false information about the product. White-label products often have a much lower price tag, but their functionality and capabilities are at the level of the competition’s well-known tech products. This might devalue the white label’s positive achievements, aiming not to distribute lower-quality products. Its primary goal is to facilitate the process of entering the ad-tech market for smaller companies. So as not to turn from white to shade, we expect white labeling to take the other, more transparent direction.
Since the white trend is relatively new in the large-scale market, its further development can open new ways to combat unfair competition and balance prices.
Can White Label Bring Balance Back?
White-label has become one of the most successful alternatives to in-house ad solutions. In 2022, it is likely to seek and find ways to get even more transparent and eliminate the potential threat of unfair competition schemes such as inflated prices and overestimated quality of certain products. Also, in the upcoming year, the trend is expected to continue its growth, expand its geography, and increase its impact on the ad tech market, giving additional options to those who need it.
The pandemic has hit business, but new trends in ad tech like white labeling are becoming solutions that can create the right balance in the post-pandemic market ecosystem.