Karolina BendrykPeople usually describe supply path optimization (SPO) as a tool that makes life easier for advertisers. And that is true, but there’s a twist: SPO can also benefit SSP and Ad Exchange owners. The question is: how? Let’s try to find the answer. But first, it is important to discuss something else:
Why should you care at all?
Two years have passed since several traffic monetization platforms—like EXM or Yahoo SSP—met their demise. It caused a stir at the time, but honestly, it wasn’t totally unexpected, was it? Even in 2020, 87% of advertisers and agencies were already prioritizing SPO to avoid intermediaries. This trend continues to grow now and doesn’t look like it will slow down anytime soon.
On the other hand, publishers are also becoming more demanding. With so many supply-side partners on the market, they have the luxury of being picky. In addition, publishers are concerned about intermediaries taking a cut from their impression revenue. So, for them, direct communication with advertisers is also preferable.
These factors pressure the SSP and Ad Exchange platforms, making it harder to stay competitive and profitable. Implementing SPO standards, however, may solve the issue.
So, how exactly can SPO benefit you?
SPO implementation provides various advantages, including:
Transparency. By reducing intermediaries (and hidden fees), enhancing visibility, providing clearer auction dynamics, and strengthening brand safety, SPO makes the supply chain more transparent. And with more transparency come better campaign performance and stronger partnerships.
Supply chain optimization. While often used for demand-side supply chain analysis, SPO methodologies equally apply to supply-side optimization. SPO technologies more efficiently identify redundancies, latencies, and potential risks. This not only helps to fix issues but also prioritizes your channel partners, allowing you to find the most inefficient ones. With this, traffic monetization platforms make their supply chains shorter and more effective, making them thus more attractive.
Fraud prevention. Bad actors use tactics like domain spoofing, click farms, and bot traffic manipulation to drain advertising budgets. SPO minimises these risks by analyzing traffic and eliminating non-human or questionable pathways. This helps to improve safety, making for a cleaner inventory and a higher rCPM (real cost per thousand impressions).
How to implement SPO for better results?
First, don’t expect a unified step-by-step guide, as it doesn’t exist. Why? SPO is a methodology based on various rules, approaches, and practices. It is up to you to decide how to adapt those rules and which technology to use.
There are, however, some general recommendations that help you build your own SPO strategy. Here they are:
Choose your partners carefully. Collaborate with those who prove their ability to provide quality inventory and implement updates to stay compatible. It is also good to prioritize direct partnerships, avoiding extra intermediaries.
Control commission fees. Minimize transaction costs by eliminating partners with complicated supply chains or outdated technologies that cause latency and decreased performance. You can also use dynamic pricing models that adjust in real time based on supply and demand requirements. This ensures that most advertisers’ payments are spent on ad impressions, not delivery only.
Monitor your supply chains and inventories. It is essential to do it regularly to ensure that all your inventories are always high quality and that all transactions are always completed smoothly. This requires a performance measurement with a clear set of metrics, such as:
ads.txt/sellers.json coverage
Latency
ROI
Win Rate
Fill Rate
Cost
Inventory Quality
Implement innovative solutions. These include advanced analytics, machine learning, and blockchain technology. Such technologies help estimate supply chain efficiency more quickly and gather a wide range of statistical data in real-time.
Conduct audits and collect feedback. Remember financial audits? One of their main points is abruptness. This also works in programmatic advertising. Sudden but regular test drives to check how your systems work in different scenarios ensure continuous optimization. Client feedback improves the final result, helping identify and address issues more effectively.
Final thoughts
Supply path optimization is a powerful strategy for advertisers, but it is also vital for SSPs and Ad Exchange owners if they want to stay competitive. SPO helps them strengthen their position in the market and attract more clients or partners.
However, SPO implementation is not the most straightforward task. There are no clear guides, as SPO is a methodology, a set of rules—or even a mindset. But methodology always requires technology. So, to get the best results, you need to equip yourself with the best innovative solutions. These include separate tools like the SPO Toolkit or comprehensive technologies likewhite-label SSP + Ad Exchange, which provide a full set of instruments to achieve your business goals.
