Ad Tech Briefing: Microsoft's DSP closure signals ad tech consolidation, as well as the AI arms race - Digiday

Microsoft's Xandr Invest Closure

Microsoft is shutting down its demand-side platform (DSP), Xandr Invest, by February 28, 2026. This decision reflects a strategic shift towards AI-powered advertising and away from traditional DSPs, which Microsoft believes cannot support its vision for future advertising experiences.

Shift Towards AI and Consolidation

The closure signifies a broader trend of consolidation in ad tech, as Microsoft prioritizes its AI-powered Microsoft Advertising Platform. This platform aims to deliver better business outcomes in a privacy-centric environment. Microsoft is also enhancing its sell-side offerings (Microsoft Curate and Microsoft Monetize) to improve publisher monetization.

The Rise of Curation and Competition

The article highlights the rise of "curation" in ad tech, blurring the lines between DSPs and supply-side platforms (SSPs). Competition is intensifying, with SSPs offering curation tools to compete with DSPs' supply path optimization (SPO) efforts. This includes products like Magnite's ClearLine and PubMatic's Activate, which allow advertisers to bypass DSPs.

• SSPs' strategies, like demand path optimization, are challenging traditional DSPs.
• Experts debate whether these are true innovations or simply market reactions necessitating consolidation.

The rivalry between DSPs and SSPs is reshaping the programmatic advertising landscape, with Microsoft's move being a significant development in an industry expected to see further consolidation.