The Power of Supply Path Optimization

Navigating the Programmatic Acronym Jungle

DSP, SSP, ROI … Oh my! 

Do you ever feel like you’re drowning in acronyms? The marketing and programmatic space is chock-full of acronyms, but SPO shouldn’t be just another on the list.  Optimizing the programmatic supply path is a highly effective process that if executed properly, can lead to significant cost savings and transparency in media buying.

What is SPO? 

Supply path optimization (SPO) is the process of analyzing and optimizing the supply path in programmatic inventory to boost transparency, minimize inefficiencies, and optimize revenue.  

To put it simply, SPO helps advertisers find the shortest and most profitable path to ad inventory.  

What’s in it for me? 

Supply Path Optimization can help to create a more transparent and efficient programmatic ecosystem for all players involved.  With the end goal of maximizing ad spend and driving stronger results.

Increased Transparency

• Advertisers are always searching for a clearer view of their programmatic activity.  SPO arms advertisers with detailed inventory and spend information.  Giving them unmatched visibility into their programmatic activity to understand the various intermediaries involved.  This transparency gives advertisers the ability to make better brand decisions and hold vendors accountable. 

Strengthened Brand Safety

• A constant battle for advertisers is ensuring their ads are placed on brand safe sites. Through SPO, advertisers can exclude suspicious suppliers who are not suitable for the brand or do not have proper brand safety criteria.  This diligence leads to higher-quality inventory.

Heightened Efficiency 

• Optimizing the supply path works to eliminate repetitive third parties to more efficiently streamline the bidding process, increasing efficiency and maximizing revenue.

Sharpened Data Safety

• In recent years, regulations for data collection and usage have significantly increased due to customer expectations surrounding privacy.  With SPO, advertisers are able to select suppliers that are in compliance with data usage and protection requirements. 

Expanded Insights

• Through a thorough examination of the programmatic supply path,f SPO allows advertisers access to granular data regarding performance leading to better optimization decisions and improvement in overall campaign effectiveness. 

Programmatic Supply Path Key Players

When delving into the realm of SPO, it’s crucial to consider a multitude of factors, starting with the main players throughout the supply chain.

Advertisers – Brand looking to put a product or service in front of consumers for purchase

Agency – A company dedicated to creating, planning, and executing advertising for a brand

DSP – A demand-side platform (DSP) facilitates automated programmatic buying for advertisers through data-driven targeting and real-time bidding optimization

Ad Exchange – A digital marketplace that enables advertisers and publishers to buy and sell advertising space through real-time auctions

SSP – Supply-Side Platform (SSP) is a tech platform for publishers that automates the buying and selling of digital advertising inventory across channels, screens, and formats through an ad exchange

Publishers – A company that creates online content, along with advertising space sold to advertisers, to distribute to consumers 

Consumers – The end viewer of advertisements through the publisher’s inventory

Take Action.

Supply path optimization is an evergreen practice that requires constant evaluation and improvement to increase efficiency and effectiveness. To fully incorporate SPO into a brand’s programmatic strategy, it’s important to understand and utilize the following four core actions:

1. 1. Internal Evaluation of the Programmatic Supply Path
      As a first step, it’s important for advertisers to identify and rank the SSPs and Ad Exchanges they are currently leveraging by their effectiveness.  Measure effectiveness is through campaign performance success and the associated working media cost to the advertiser, to identify the highest value.  Additionally, identify non-working media costs required by each supplier. This can include data layers, creative, inventory, and measurement.  Complete a thorough evaluation to understand each supplier’s current position in the programmatic space.

2. 2. Identify inventory for Consolidation
      With this deeper understanding of their programmatic partnerships, brands can identify and remove inventory sources that may be hindering their success through overlap and excessive fees.  Programmatic budgets are redistributed toward efficient inventory sources that align with the overall business strategy.

3. 3. Develop a Testing strategy to understand campaign performance
      Create various testing scenarios to effectively track campaign performance. Once complete identify the most successful supply path for the brand according to nuanced objectives. Once this information is obtained, it will facilitate better-informed decisions regarding campaign performance and effectiveness.

4. 4. Require Ongoing Optimization for success
      Optimal balancing of programmatic supply paths demands continuous assessment and refinement in search of enhanced performance opportunities. With publishers finding more new ways to monetize their inventory within different marketplaces, it’s not a one-time task that can be completed and forgotten. We recommend reviewing inventory logs on an ongoing basis, with a full evaluation once a year.

We Can Help!

Leveraging years of hands-on expertise, we developed our namesake biddable media assessment, which has armed some of the largest fortune 100 brands with actionable strategies to increase programmatic efficiency and effectiveness.

Our proprietary approach evaluates ten distinct pillars, inclusive of Supply Path Optimization, to maximize biddable media efforts and build meaningful connections with consumers. The result is a comprehensive view of a brand’s biddable media maturity compared to the industry, summarized opportunities for enhancement and innovation, and a detailed action plan for enablement.

If you are interested in understanding how your brand can better optimize their supply path, connect with us at: https://www.transparent.partners/connect.