What if we did something courageous that leverages the fact that we have strong buy and sell-side offerings. We drop the AdX/Demand Product margin to a transparent 5% for undifferentiated demand. What I mean by undifferentiated demand is demand a publisher can get through any SSP that doesn't leverage the use of proprietary data. The pipes that deliver that demand should charge a 'utility fee'. Let's call it 5%.

Now let's look at what happens to our business if we move to a 5% fee for undifferentiated demand. AdX Buyer Demand: Our take rate plunges from around 20% to 5%. 2018 forecast for AdX Buyer revenue is $1.8B growing at 2% yoy. Net revenue would go from $360M to $90M, for a total loss of $270M. However, demand/performance would likely increase significantly if we drop margins to 5%.

For differentiated DBM demand (i.e. demand where DBM uses proprietary Google data and targeting), AdX takes a non-transparent margin on top of the 5%. We don't disclose this margin and it's dynamic, but our average take rate may well surpass 20% for differentiated DBM demand.

The message to the market would be: AdX/DP is now charging 5% for basic demand — what is your SSP charging you? The second order effects of this strategy would be quite positive for Google, but those are best discussed in person.

[Jim Giles adds:] I think pure SSP is definitely commoditizing — ultimately, I think only SSPs that also have an ad server will survive. The combination of ad server / exchange plus data gives us cover for total costs that are higher than other exchanges.