The industry has been buzzing about Supply Path Optimization (SPO) recently– primers on what it is, how it works, how to effectively implement it and more. If you are unfamiliar with the term, SPO allows a buyer to work with fewer SSPs, selecting those that provide higher quality inventory, more direct publisher connections,and higher relevance to the intended audience. In addition, SPO provides transparency and greater oversight for catching fraud cases.
If you already understand the value of SPO, you likely also have some understanding of how to measure supply path optimization success. While the evaluation process will be different for all buyers, there are certain metrics broad enough to apply to almost any organization. These performance indicators can be grouped into three buckets: performance, innovation, and long-term partnership.
Monitoring performance is first and foremost when evaluating your SPO success, and part of measuring performance means having a clear understanding of the auction dynamics. This can be achieved through discussions and RFIs with each SSP.
There are some SSPs – PubMatic among them – who provide fraud-free programs, offering refunds to buyers for fraudulent activity. Emerging standards such as ads.txt and app-ads.txt also offer greater transparency, which allow buyers to evaluate the health their SSP’s supply chain more easily. Ideally, SSPs should be evaluated monthly so you can stay up-to-date on their performance metrics.
It is important to note that when the performance metric is click-through-rate (CTR) or a metric further from the purchase, clean supply can actually reduce perceived performance. Rather than being a deterrent from SPO, buyers should approach this as an even greater reason to ensure supply is as clean as possible as they are optimizing towards a proxy and not a revenue metric.
One of the opportunities that supply consolidation represents is the ability for a buyer to influence the road map of its partner SSPs. Product innovation and feature delivery has a dramatic impact on both the performance and work-flow of campaigns. Reviewing progress made against deliverables and comparing that performance to product roadmaps will keep you in sync with your partners.
Additionally, technology is evolving at a rapid rate. SSP services and capabilities expand, trends dissipate and emerge, programmatic channels evolve, and uninformed buyers can be left in the dust. Buyers should be in communication with the SSPs where they have consolidated spend to review product roadmaps to confirm their paths line up with marketing mixes.
Implementing SPO involves culling the number of SSPs through which your organization buys. By consolidating spend, SSP partners should be require to provide more transparency and alignment with your goals as a buyer. These kinds of partnerships are subjective but we recommend a few universal metrics to measure an SSP’s worth.
First, consider the willingness for the SSP to be transparent around its auction dynamics, fees and publisher integration types. Secondly, evaluate the training sessions and updates on the technology or emerging trends you receive that may impact your campaign’s performance. Like any partnership, the highest success is dependent upon communication and, ultimately, people. Finally, consider the integrity, financial stability and long-term viability of your partner. When investing in your supply chain through optimization, it is vital to make sure that this is a long-term partnership so you can build trust and confidence.
Effective SPO implementation can be a boon for efficient, programmatic advertising. Given the benefits to buyers, we expect to see further consolidation in supply paths. Additionally, we believe there will be programmatic cost reduction as operations become more efficient and buyers gain more leverage with their cost structure.
At the same time, innovation will rapidly increase as programmatic advertising drives more and more spend. We look forward to long-term success and deepened relationships with buyers and publishers as SPO grows. To learn more about how to get started and how to measure supply path optimization success, download the white paper or contact us.