6 Ways publishers can use supply path optimization to increase their revenue

The world of advertising is extremely dynamic, and publishers are constantly searching for ways of gaining a competitive advantage. With a recognizable decline of traditional advertising methods, programmatic ads have started to dominate the market. This trend makes ad publishers search for advanced ad publishing practices. One such practice is applying supply path optimization (SPO). This process focuses on evaluating and refining the pathways through which ad impressions are transacted. With a proper SPO, publishers can enhance transparency, eliminate inefficiencies, and drive revenue growth dramatically.

What are the benefits of SPO and what are its use cases for publishers? In this blog post, we will explore six reasons for publishers to prioritize SPO and use it as a powerful tool to maximize their advertising potential.

What is an SPO in digital advertising?

A Supply Path Optimization (SPO) in digital advertising involves managing and optimizing the efficiency of the programmatic supply chain. It is used to deliver better outcomes for advertisers and publishers. The digital advertising ecosystem often involves multiple intermediaries, such as demand-side platforms (DSPs), supply-side platforms (SSPs), ad exchanges, etc. Some inefficiencies can occur along this way, including the presence of a redundant inventory and increased costs. With an SPO, publishers can evaluate and prioritize the most transparent and cost-efficient paths to inventory, eliminating unnecessary and often costly elements of the supply path. In addition, the right approach to supply path optimization helps publishers find trusted partners who provide value at a reasonable cost.

What are the stages of an SPO?

Supply path optimization is a process involving various stages and techniques. Let's outline the key stages involved in SPO:

1. Audit of the current supply chain. This stage involves inventory mapping aimed at identifying all supply sources and intermediaries involved in delivering inventory. During this stage, specialists also gather metrics, such as win rates, CPMs, fill rates, and viewability scores for supply chains. It is also important to analyze the transparency of supply paths, focusing on such parameters as fees, inventory quality, and reporting.

2. Identifying inefficient paths. With SPO, companies can detect overlapping supply paths that access the same inventory from different SSPs or ad exchanges. As a result, publishers gain a greater view of the competition and can aim to provide unique content to advertisers. This practice also involves detecting inefficient intermediaries and flagging supply paths that consistently deliver poor performance or suspicious traffic.

3. Prioritizing the most efficient supply paths. At this stage, executives rank supply paths based on KPIs, such as viewability, CTR, and conversion rates. It is also important to review supply paths for fraud, eliminating suspicious connections.

4. Implementing optimization strategies. At this stage, it is important to ensure the consolidation of partners. It goes about reducing the number of intermediaries, ensuring better targeting, and providing a unique ad inventory to the advertisers. Publishers may also aim to connect with the advertisers directly in order to enhance the efficiency of supply paths in general.

5. Monitoring the supply paths. Upon optimizing the supply paths, it is important to monitor the outcomes of such changes. It goes about establishing performance tracking focused on measuring key metrics, such as ROAS, CPM, and engagement. Other common practices for this stage involve testing different supply paths and configurations to determine the most effective options. Publishers also use insights from the advertiser's campaigns to understand the directions for continuous optimization.

6. Continuous scaling and optimization. It is important to establish a culture of continuous development in regard to supply paths. Potential directions for improvement are implementing AI-based automation and ongoing evaluation of SPO strategies as the programmatic landscape evolves.

Overall, an SPO can be used by advertisers aiming to maximize the return on ad spend (ROAS) and publishers who are planning to gain high-quality demand without excessive fees. While being primarily a strategic approach, an SPO also relies on tools, data-driven insights, CPMs, and various metrics. Let's discuss the benefits that SPOs bring to publishers in more detail.

How does an SPO help digital publishers: six ways

Supply path optimization (SPO) offers significant benefits to digital publishers. The point is that such a strategic approach helps them streamline ad delivery and enhance monetization opportunities. With an SPO, publishers can establish more direct and transparent relationships with demand-side partners. This ensures fairer revenue splits and reduces the reliance on intermediaries. Here are some ultimate SPO benefits for publishers.

1. Enhanced inventory control for better user experience

Optimizing the supply chain through supply path optimization (SPO) empowers publishers with greater control over their ad inventory and pricing strategies. This, in turn, leads to higher profitability. First, supply path optimization allows companies to reduce reliance on intermediaries and establish more direct relationships with demand partners. As a result, publishers can retain a larger share of revenue from each transaction. SPO also provides publishers with enhanced visibility into the supply path. This allows them to understand how their inventory is accessed and utilized by advertisers. Publishers can identify high-performing demand sources and eliminate underperforming or redundant partners.

Finally, improved inventory control allows publishers to curate their ad offerings more effectively. They can reach and prioritize premium placements and tailor their inventory to attract high-value advertisers. With better control over ads and more direct interactions with advertisers, publishers can take their business efficiency to the next level.

2. Enhanced visibility of supply paths

With multiple layers in the supply chain, publishers often face challenges in understanding how their budgets are allocated and how inventory is sourced. SPO provides greater visibility into these processes. With such a transparent approach, publishers can identify the most fitting ways to supply their inventory.

In addition, an SPO toolkit, can provide you with features for monitoring your supply chains' security. Unfortunately, the domain of programmatic advertising is filled with fraud and intermediaries serving indirect traffic to the advertisers. By blacklisting suspicious supply paths, publishers can ensure a more secure connection to demand partners. This, in turn, has a positive impact on their market reputation.

3. Quality control and safety

By favoring demand-side platforms (DSPs) and supply-side platforms (SSPs), supply path optimization helps publishers enhance the overall quality of the advertising ecosystem. As publishers apply modern DPSs and SSPs to connect with demand partners instead of legacy APIs, supply paths modernize and become more open for continuous improvement. With transparency, efficiency, and brand safety, aspects that are typically associated with SPOs, publishers can maintain the integrity of their digital properties while achieving high levels of automation and avoiding fraud. Enhanced publisher reputation, in turn, makes them more attractive to advertisers and enhances the publishers' business operations.

4. Improved operational efficiency

SPO simplifies programmatic ad transactions, which is a critical benefit for the publisher's operational efficiency. A well-organized optimization reduces the complexity and costs associated with managing multiple intermediaries. As a result, publishers can focus on creating content instead of navigating a convoluted ad tech stack. An optimized supply path is also characterized by high levels of automation and more tailored delivery of ads to potential buyers.

5. Data-driven decision making

Studies show that around 80% of marketing specialists rely on data analytics to make crucial decisions. With an SPO, publishers gain access to invaluable data insights. By optimizing reporting, publishers can better understand buyer behavior and campaign performance. This facilitates more informed decision-making. Publishers gain an opportunity to retrieve and analyze data from each node of a supply path by using various tools. With such insights, companies can tailor their inventory strategies to align with market demands, boosting the overall value of their ad inventory. This, in turn, increases the demand for their services, as well as enhances revenue streams and market visibility of publishers' companies.

6. Continuous improvement and healthy competition

SPO boosts innovation within the advertising ecosystem. The point is that supply path optimization allows publishers to identify specific areas that require improvement. With the growing demand from advertisers, publishers are required to improve their technologies and practices to remain competitive. This continuous improvement benefits all stakeholders and elevates industry standards, driving growth and automation across the entire domain.

Tips on supply path optimization for publishers

Now, let's discuss some practical tips from our practice in TeqBlaze. These suggestions might help you avoid common challenges while working on supply path optimization. Here are effective SPO tips that will help publishers embrace effective SPO practices and achieve greater transparency, efficiency, and profitability.

Invest in advanced technology

Leverage advanced technology platforms designed to support SPO. For instance, a white label SSP + ad exchange platform with strong analytical capabilities can help publishers in many ways. It can help you identify high-performing demand sources and eliminate those that don’t add value. You can also employ header bidding technology to enable fair competition among buyers. Speed is essential for ad publishers, and such implementations will help you deliver your inventory to advertisers much faster.

Center your optimization efforts around an efficient SSP

A Supply-Side Platform (SSP) is a central element in the supply path. It is a tool that allows ad publishers to efficiently manage, sell, and optimize their digital ad inventory. SSPs connect with Demand-Side Platforms (DSPs) and various ad networks, enabling real-time bidding (RTB) for ad impressions. 

With an SSP, publishers can get access to the following features:

• Tools for inventory management

• Options for managing and adjusting ad pricing

• Real-time bidding (RTB) functionality

• Yield optimization features

• Advanced audience targeting and segmentation options

• Analytics and reporting tools

• Fraud detection mechanisms

• Integration with DSPs and ad exchanges.

Partner with trusted technology providers

The global market of programmatic advertising is full of various technological solutions. However, not all of them bring actual value and functionality that fits your needs and helps you optimize your supply paths. Focus only on the most reputable solutions, such as white-label SSPs or DSPs. Look for partners with robust fraud detection mechanisms and a proven commitment to delivering high-quality ads. Also, don't hesitate to opt for custom solutions. Such an approach can bring many benefits to the publishers because it allows them to obtain tailored functionality. Each company has its particular SPO challenges, and a custom advertising platform will address these challenges specifically.

Employ the best fraud prevention practices

Unfortunately, the domain of digital advertising is not devoid of fraud and other cyber threats. One of the key aspects of supply path optimization is safeguarding your platform from such issues.  Make sure to analyze the threat of fraudulent activities, such as click fraud, impression fraud, and bot traffic. After that, apply relevant practices for eliminating such problems within your SPO initiative. Efficient steps might include implementing advanced fraud detection tools powered by artificial intelligence to identify suspicious activity in real time. Collaborating with trusted partners, such as verified ad exchanges and supply-side platforms (SSPs), also helps you maintain transparency. Regular audits, data analysis, and adherence to industry standards can help you mitigate fraud risks even further.

Rely on data

Use insights from data analytics to plan your supply path optimization. Tools with detailed reports and predictions can help you decide which demand partners and ad paths work best. It goes even better when you use these insights to focus on partnerships and strategies that bring the most value. Regularly reviewing your data also lets you improve over time, ensuring your supply paths work well and stay relevant in a fast-changing market. Data analytics also helps publishers come up with a more objective vision of their inventories, ensuring more tailored offers to advertisers.

Conclusion: maximizing opportunities with SPO

We at Teqblaze recognize the fact that supply path optimization (SPO) has become a vital practice for digital publishers. It helps them enhance inventory control, gain better visibility of supply paths, contribute to the development of a high-quality advertising ecosystem, improve operational efficiency, boost data analytics, and embrace continuous improvement. By refining supply chains, ad publishers can access premium advertisers and enhance revenue streams. With the right strategies, SPO can unlock the full potential of programmatic advertising. One of the focal points in such strategies involves relying on high-quality tooling. SSPs, DSPs, and ad exchanges are important drivers for innovation when it comes to SPO. Regardless of the tools you choose, it is important to commit to continuous improvement and view SPO as a practice that should be revisited periodically.