How to mitigate channel conflict and data risks within programmatic commerce media

As commerce media networks (CMNs) scale and adopt programmatic activation, two strategic concerns rise to the forefront: channel conflict and data privacy.

The fear of cannibalizing high-margin, direct-sold inventory through DSP access is real. So is the scrutiny surrounding IP address transmission during real-time bidding. But while both risks are valid, neither is unsolvable. With the right structure, controls, and partnerships, CMNs can confidently embrace programmatic demand without undermining control, yield, or trust.

Programmatic isn’t a threat to shopper budgets; it’s a gateway to new demand

A persistent myth in commerce media is that opening inventory to DSPs will eat into shopper marketing budgets. But this overlooks a fundamental truth: national brand and shopper marketing budgets are organizationally and operationally distinct. Each are distinct budgets with distinct goals.

National brand budgets—the ones flowing through DSPs like The Trade Desk, DV360, and Yahoo—are designed to drive awareness, reach, and consideration. These campaigns are managed by brand teams and agencies with KPIs like CPM, reach, and brand lift.

Shopper marketing budgets, in contrast, are owned by commerce or trade teams, often activated within the retailer environment. Their KPIs are ROAS, sales lift, and in-store alignment. These budgets are designed to drive action at the point of purchase, not upper-funnel reach.

This structural separation means that enabling DSP demand won’t cannibalize existing spend. Instead, it taps into new budgets previously out of reach. Advertisers plan with surgical precision—each team fights for its own dollars, and overlap is not a given.

DSP activation expands total demand, unlocking brand spend that complements rather than competes with shopper campaigns. When executed strategically, programmatic enhances auction dynamics and yield without jeopardizing existing revenue streams.

Tactical levers to mitigate channel conflict

Beyond structural separation, CMNs have a rich toolkit to actively manage and protect their direct-sold relationships.

1. Private marketplace controls: Use allowlists or blocklists to exclude sensitive brands with active native campaigns.

2. Programmatic floor pricing: Establish fixed or dynamic floors to ensure DSPs don’t undercut direct rates.

3. Waterfall prioritization: Give direct-sold campaigns first rights to inventory before allowing programmatic bids.

4. Collaborative DSP partnerships: Forward-thinking DSPs don’t want to disrupt commerce media ecosystems. Through strategic partnerships, they can offer spend transparency, support supply path optimization, and educate brands on the value of native formats.

The right SSP enables all of these controls and offers flexibility to pause or deprioritize DSP placements if necessary, though sparing use is advised to maintain advertiser confidence.

Data privacy: Addressing the IP address debate

As CMNs scale into programmatic, data privacy becomes more than compliance: it becomes a brand value. One of the most scrutinized aspects is the sharing of IP addresses.

Ip addresses can quickly raise red flags with privacy teams. While not always classified as PII, IP addresses fall into a gray zone under GDPR and CCPA. Their handling often triggers legal reviews, especially in privacy-conscious organizations.

However, IP addresses are critical within programmatic. DSPs require IP addresses to:

• Detect and block invalid traffic (IVT/SIVT)
• Maintain MRC accreditation
• Perform bid deduplication

These uses are protective, not exploitative. Major DSPs have clearly stated that IPs are not used for targeting or identity resolution in commerce media contexts—they are operational infrastructure.

Koddi SSP: A privacy-first platform by design

Koddi’s SSP was built with retailer control and data privacy at its core. Here’s how:

• Data processor, not controller: Koddi only processes data per retailer instructions.
• No IP retention or enrichment: IPs pass through the platform strictly for bidding.
• Compliance by default: Built to align with IAB’s Transparency and Consent Framework (TCF) for retailer-configurable privacy controls.

Koddi enables what’s required—no more, no less. There is no audience creation, no IP persistence, and no exposure beyond what is operationally essential.

Conclusion: Enabling programmatic while protecting what matters

Commerce media networks don’t need to choose between control and scale. With the right infrastructure, clear controls, and privacy-first design, they can access new sources of demand without undermining their existing monetization strategy.

The Koddi SSP empowers this future, designed to prioritize yield, protect privacy, and preserve trust in every programmatic transaction.