MediaMath’s Bankruptcy: An Industry Turning Point

How the ad tech landscape is adapting moving forward

The digital advertising industry boat has been rocked by a bankruptcy announcement with far-reaching consequences. MediaMath, a demand-side platform (DSP) once valued at over a billion dollars, recently announced bankruptcy – a move that was at best predicted some weeks in advance by players in the industry, and that at worst is resulting in big losses across the value chain.


Here’s a run-down of what happened, how the industry is changing to prevent a repeat event, and how you can protect yourself in the future.



MediaMath rose to prominence as one of the industry’s first programmatic DSPs, raising more than $600 million since 2007 and peaking at an over $1 billion valuation in 2018. Despite that history and over a hundred thousand clients, MediaMath began struggling financially and failed in negotiations to secure an acquisition, eventually surprising the industry with Chapter 11 bankruptcy at the end of June.


The exact reasons behind MediaMath’s bankruptcy are messy, with speculations about acquisitions gone awry, mismanaged finances, and accusations of poor leadership.


Without delving into loose talk, however, a bottom line was effectively summarised by Jeremy Sonne for The Drum: “[The DSP business is] a low-margin, high-volume business with lots of churn that is ultimately going to continue to consolidate.”


That means that when MediaMath started accumulating debts, eventually amounting to $65 million in unsecured claims, the hole was difficult to fill.



Publishers affected by MediaMath’s bankruptcy are feeling the brunt as they’re in the unfortunate position of being at the bottom of digital advertising’s daisy chain.


The chain of payables and receivables is called sequential liability. MediaMath, as a DSP, pays SSPs first when they finally receive their payment from agencies, who in turn receive payment from advertisers.


The gap from DSP to publisher can take months – even when the cycle’s healthy. It should be expected to take a far longer time in the wake of MediaMath’s collapse, as the bankruptcy and the money owed need to be painstakingly sorted out – payments dating back to the beginning of 2023, for example, need to be entirely re-evaluated.



MediaMath’s bankruptcy didn’t occur in a vacuum. Despite the mismanagement rumors and the low-margin, high-volume model that are unique to DSPs like MediaMath, the company was also a victim of a wider economic situation that’s causing slower growth rates for digital advertising around the world.


When cash flowed more easily, the daisy-chain model of sequential liability made more sense – waiting an extra hundred-odd days for payment didn’t hurt. As budget belts tighten, a month’s delay in receiving payment can make all the difference between staying afloat and disaster.


Today, the industry is moving towards a ‘less is more’ approach. It’s telling that The Trade Desk is increasing in popularity as it consolidates the supply chain by going straight to publishers and cutting out SSPs with its OpenPath project.


With that said, The Trade Desk’s approach of consolidating with large publishers risks leaving smaller voices in the dust – something at odds with the ShowHeroes Better Media pledge.


Joseph Lospalluto, Country Manager US at ShowHeroes Group, summarized The Trade Desk’s approach for Ad Exchanger:


“The recipe is quite simple. Aggregate the largest amount of inventory possible, as direct to source as possible. Then siphon data from that inventory and secure it for trade only within your ecosystem. This yields audience data volumes at scale, which advertisers love. However, it will leave publishers little choice but to work with yet another large aggregator of demand.”


“MediaMath’s bankruptcy cements it: as an industry, we can’t go back to business as usual,” says Ilhan Zengin, CEO at Showheroes Group. “That doesn’t mean being cutthroat or prioritizing profits over the industry’s health. On the contrary: it means less players adding much more value, and streamlining an unhealthily bloated industry.”



ShowHeroes is a global digital video advertising tech and media leader that provides both advertisers and publishers with engaging ad formats, AI-powered and privacy-protecting semantic targeting technology, and a library of over 150,000 professional-quality video clips in over twenty languages.


The digital advertising daisy chain is shrinking, but ShowHeroes will remain an integral part of it – one that acknowledges the need for supporting publishers as trustworthy partners, regardless of the buying channel or DSP involved. As a co-publisher, brands and advertisers directly benefit from our transparency and measurable KPIs.


ShowHeroes’ premium network of publishers is made up of hand-picked partners, chosen with an eye for diverse and local voices who share our Better Media ethos to balance people, planet, and profit.


“We actively collaborate with our publishers to ensure best-in-class solutions, video content and also sustainability improvements,” says Dustin Puschmann, VP Business Development Supply & Partnerships at ShowHeroes Group. “Our focus on improving every aspect of our supply chain is consistent with our goal to both reduce our carbon footprint and allow for all publishers to thrive in the media industry.”


If you’re interested in learning more, we’d love to get in touch.