Little boxes and ad tech’s fragmentation paradox

Little boxes on the hillside

Little boxes made of ticky-tacky

If you’ve never heard the song “Little Boxes,” it’s worth a quick listen. Written in the 1960s and later resurfacing as the theme song of Weeds, it pokes fun at society’s obsession with neat categories: identical houses, identical careers, identical lives. Everything neatly sorted into boxes.

Ad tech would approve. Because if there’s one thing this industry loves, it’s a good label. DSPs buy; SSPs sell; publishers publish; agencies plan; measurement companies, well, you get the idea, measure. Little boxes. All the same. At least in theory.

The moment someone leaves their box

In practice, the ad tech industry has spent the last few decades complaining about fragmentation, inefficiency and too many intermediaries. Too many hops, too many fees and way too little transparency. And everyone agrees, the supply chain should and could be a lot simpler.

Add to that the fact that every few years the industry rediscovers the idea that DSPs and SSPs should converge or that the supply chain should magically collapse into something simpler. The irony is that we’ve been here before. “Veterans” of the good old ad exchange era remember a time when the boundaries were much blurrier. Ad exchanges, networks, platforms and intermediaries overlapped constantly. And no, it wasn’t exactly a golden age of transparency or efficiency either. But nostalgia and memories have a funny way of smoothing out inconvenient details.

Anyway, this entire discussion ends the minute someone actually tries to simplify it.

Then the pitchforks come out.

When simplification gets personal

A recent example illustrates this perfectly. Take The Trade Desk and its supply-chain initiative OpenPath. The idea is straightforward: create a more direct path between advertisers and publishers, removing unnecessary intermediaries and improving signal quality. Which sounds suspiciously like the efficiency everyone claims to want. Yet the reaction across the ecosystem in general (and trade press in particular) has been… complicated.

Suddenly, convergence becomes “DSPs muscling into the sell side.”

Suddenly, simplifying the path becomes “cutting out important partners.”

Which is interesting, considering the industry has never been particularly strict about those boundaries (except for the various legal battles but that’s another story). Amazon’s DSP operates deep inside supply-side territory, and Google has historically managed to occupy just about every position in the supply chain.

And it was never a one-way street to begin with. Supply-side platforms have been edging toward the buy side for years. Take platforms like PubMatic’s Activate or the expanding toolkits from Magnite. All of them show that stepping outside the box isn’t limited to DSP ambitions. Yet when SSPs move closer to buyers, it usually receives far less backlash from the industry and is often celebrated as innovation. But when DSPs move closer to supply, it suddenly becomes a territorial dispute. Go figure. 

Follow the money, keep the boxes

Fact is, the same industry that complains about too many intermediaries becomes deeply uncomfortable when one disappears or even when an alternative is offered. So why do the boxes persist? Because they’re useful. Not necessarily technically, but economically. Boxes define who gets paid for what. They establish territory, and they make the ecosystem legible.

And that’s where the ad tech paradox begins. The industry constantly talks about the need to reduce fragmentation while operating a business model that strongly depends on it. So while fragmentation may be inefficient, it’s also extremely profitable.

That said, fragmentation itself isn’t the enemy. A certain degree of it is actually healthy. Different players, independent measurement and multiple intermediaries can create checks and balances that prevent the entire ecosystem from turning into one giant black box. Fragmentation driven primarily by incentives rather than necessity, however, is an entirely different story. Every hop in the supply chain represents technology, service or data that someone can charge for. No surprise that when someone actually removes a hop, the question suddenly becomes: “Wait… whose hop was that?” And, fair enough, no one volunteers to be the fragment that gets optimized out of the supply chain.

Which explains why programmatic advertising often behaves like a system that promises to eliminate intermediaries while continuously inventing new ones. (Yes, the simplest answer is usually the right one: follow the money.) And why discussions about “convergence” tend to sound great in conference panels… right up until someone actually tries it. 

AI doesn’t care what you call the box

Right, and then there’s AI. For two decades, the industry tried to organize itself into neat categories. AI might not be particularly interested in them. Agentic AI systems are starting to reshape how advertising workflows operate. Automating decision-making, optimization and execution across multiple layers of the stack. Which means the rigid categories that structured programmatic advertising may become less relevant than the signals and outcomes those systems produce. May. Time will tell.

For now, those little boxes on the hillside are still standing. But not everyone is content with living in one. And that’s good. Maybe ad tech should be a bit more like Carol, not particularly interested in becoming part of the uniform mass.

This op-ed represents the views and opinions of the author and not of The Current, a division of The Trade Desk, or The Trade Desk. The appearance of the op-ed on The Current does not constitute an endorsement by The Current or The Trade Desk.