The DSP reckoning has begun. In May 2025, Microsoft made it official: the Xandr Invest DSP will be shut down by February 2026. For many, this news felt like the closing of a historic chapter in AdTech. Once known as AppNexus, Xandr was a pioneer, a key player in shaping the early foundations of programmatic buying.

But Microsoft’s decision isn’t just about internal restructuring. It’s a wake-up call. It shows us that the traditional DSP model that many of us have relied on for years isn’t enough anymore. And no, this doesn’t mean all DSPs are doomed. But it does mean they need to evolve fast.

This article unpacks what went wrong in the realm of DSP, where the market is headed, and why the future belongs to adaptive, AI-powered platforms that do more than just bid.

What went wrong with many DSPs

Let’s look at Microsoft’s reasoning. According to their official statement, the current DSP model no longer aligns with the kind of private, personalized, and agentic ad experiences they’re building.
That’s a powerful insight and it reflects what many of us in the industry already feel. Legacy DSPs are struggling to keep up.

Here’s why:

  • Siloed data: Older systems often can’t pull together insights across channels or platforms, which limits personalization.
  • Slow learning loops: Many DSPs still optimize using outdated models, with no real-time learning or feedback.
  • Lack of interoperability: They weren’t built to work with today’s fast-moving martech stacks.
  • Privacy challenges: Regulations have changed, and many legacy platforms weren’t built with compliance in mind.

The problem isn’t with the DSP concept itself, it’s with the infrastructure that hasn’t kept pace. Platforms built a decade ago can’t compete in a space that now demands real-time intelligence and AI-driven decision-making.

The rise of smart, adaptive media buying

So what’s replacing these old systems? It’s not just newer DSPs but a whole new mindset. Modern buying platforms are fast, flexible, and smart. They don’t just run campaigns — they learn, adapt, and predict.
Here’s what that looks like in practice:

  • AI-enhanced bidding: Machine learning optimizes in real time, based on user signals and performance patterns.
  • Conversational ad formats: Interactive and shoppable experiences create more meaningful engagement.
  • Agent-driven journeys: Ads adapt dynamically to each user’s behavior across channels.
  • Privacy-first logic: Platforms can now balance performance with compliance, using contextual signals and identity-resilient strategies.

In short, today’s best solutions offer personalization at scale without compromising on speed, privacy, or relevance.And this shift isn’t optional. It’s happening now. The sooner brands adapt, the more competitive advantage they’ll have.

Our approach: a DSP that’s built for the future

At SmartyAds, we saw this shift coming. That’s why our DSP isn’t “just another DSP.” It’s a future-ready platform that adapts as fast as the industry moves. Here’s what makes our approach different:

  • AI-powered bidding and targeting: Our engine continuously learns from performance data to drive better outcomes.
  • Support for emerging channels: Whether it’s CTV, DOOH, or programmatic audio, our DSP evolves with media trends. Read more here.
  • Built-in contextual targeting: Thanks to contextual targeting feature, our platform uses real-time content signals to reach the right users. More on that here.
  • Strong data partnerships: We also work with DMPs like LiveRamp, enabling diverse audience targeting through rich, privacy-compliant data. Read more on this partnership.

Our DSP helps advertisers go beyond impressions and clicks into smarter, more adaptive programmatic journeys.

What advertisers should do now

Let’s be clear: Microsoft’s move isn’t just a corporate decision — it’s a market signal.If you’re still using a legacy DSP, it’s time to pause and ask a few tough questions:

  • Is my current stack scalable enough to grow with new formats and channels?
  • Is it privacy-ready and able to function in a cookieless world?
  • Does it support AI-powered optimization that delivers results in real time?

If the answer to any of these is “no” then don’t wait for your DSP to sunset. Now is the time to explore platforms that are already built for what’s next. Because replacing Xandr isn’t the goal. Future-proofing your media strategy is.

5 questions to ask before choosing your next gen DSP

Before switching platforms, make sure your next DSP isn’t simply different but is built for the future. Ask yourself:

  1. Does it support AI-driven bidding and real-time optimization?

Your DSP should be able to learn and react on the fly: adjusting bids, creative, and targeting based on live data, not yesterday’s results.

2. Is it built to meet modern privacy standards and support identity-resilient targeting?

With third-party identifiers losing relevance, your platform needs to deliver results using contextual signals, first-party data, and privacy-safe strategies by default.

3. Can it handle emerging ad formats and omnichannel delivery?

From CTV and DOOH to audio and mobile, your DSP should support diverse environments, and make cross-channel planning seamless.

4. Does it integrate easily with your current martech stack?

A modern DSP should connect effortlessly with your CDP, analytics, and attribution tools with no delays.

5. Can it scale with your business?

Whether you're targeting global audiences or niche verticals, your platform should grow with you while supporting volume, complexity, and innovation as you evolve.

The end of an era, the start of a smarter one

Xandr helped shape programmatic. Its closure doesn’t mean the DSP model is dead. It simply means the industry is maturing. Fast. Advertisers shouldn’t settle for platforms that are stuck in the past. They deserve solutions that innovate, adapt, and grow with them.

So if you’re ready to stop managing limitations and start unlocking new opportunities, explore what our AI-powered DSP can do. It’s more than a replacement. It’s a step into the next generation of programmatic success.

Future-proof your business — register on our innovative SmartyAds DSP today!