As programmatic continues to become a larger share of media spend, advertisers are taking more ownership of programmatic buying and concluding, along with the agencies that work on their behalf, that bespoke supply strategies can drive outsized results.
The programmatic supply chain can be difficult to navigate for any brand seeking to reap the benefits of data-driven marketing. There has been a raft of well-publicised challenges related to fees, quality and auction transparency in programmatic. How much of each advertiser dollar gets to the publisher? Which companies are taking a piece out of that dollar? What value does each company on the supply chain add?
Rightly, buyers are demanding greater transparency across the supply chain of digital advertising. They want to know where their dollars are being spent, and they want more with less.
The issue of transparency has given rise to supply path optimisation (SPO), as media buyers look for more addressability across the supply chain. Agencies and brands are reassessing their relationships with supply partners with a view to developing fewer and deeper partnerships.
In a nutshell, SPO is the process of reducing the number of intermediaries until each is adding value. While it was initially championed by DSPs, its appeal is expanding, and becoming industry practice, especially amongst advertisers.
When many in the industry think about SPO, the first lever that comes to mind is economics. Advertisers, agencies and DSPs may use consolidation as a means of extending the impact of their ad dollars.
By working with fewer SSPs, it is easier for buyers to manage their supply relationships and understand the fees being charged, as well as when and where those fees are being taken.
SPO initiatives can extend the impact of a buyer’s ad spend through preferential rates for consolidated spend, and the removal of counterproductive auction dynamics – such as bidding for the same inventory across multiple SSPs.
Furthermore, a robust SPO strategy gives buyers quality control over their buys. In the absence of any SPO, a buyer’s ad spend will often naturally flow to riskier supply paths – such as cheaper, spoofed inventory.
By employing SPO—and specifically SSP consolidation—buyers are able to realize the benefits of quality-focused SSP’s and ensure their ad spend ends up on premium apps and domains.
It’s too easy for under-the-table mechanics to thrive in a complicated ecosystem. Simplicity breeds accountability and simplicity is at the core of supply path optimization.
Ultimately, it’s about trust – trust in programmatic, trust in vendors, trust in the emerging channels and, overall, trust in the industry.
Originally published in B&T
