Digital advertisers are still trying to unravel the chaos caused when header bidding reshaped the programmatic advertising industry, creating an overly complex environment riddled by issues like auction duplication, fraud, and poor quality control. We’ve called the approach “supply path optimization” (SPO) — a war of many fronts against endless intermediaries, time-wasting redundancies, and profit-draining economic inefficiencies.
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What does SPO mean in practice? It’s a tricky question: even if something looks like the most “direct” path between advertiser and publisher, it may not necessarily be the cheapest or fastest, and therefore it can’t be true “optimization.”
Trust is the real optimizer in SPO. Instead of short-term SPO hacks that cause more problems than they solve, these core principles of trust should guide marketers’ long-term ad strategy and business directives. Brands must practice, as their foundational values, transparency to establish trust, data to maintain trust, and trusted partners to build a future with.
Trust Requires Transparency
The IAB’s sellers.json initiative created transparency and enabled buyers to identify intermediaries with full control over an ad serving decision. This transparency enables advertisers to identify which resellers add value and which don’t. It’s an important early step in building an ecosystem where trust is the main ingredient, and it will need to be supported by even more industry dedication to transparency.
Finding the exchange that offers trust and transparency with both their data and technology will be far more valuable than the exchanges that offer too-good-to-be-true prices. Even with higher fees, trusted partners get us closer to true SPO faster. With trusted exchanges and vendors you can reap the benefits of sturdy integrations and consistent performance.
Trust in Good, Holistic Data
Brands that take a holistic, data-centric approach to their SPO have been shown to improve their campaign ROI by 10% or more. The emphasis is on holistic: cost-saving exchanges often means failure-prone supply paths that lead to transactional failures. To avoid this, marketers must understand the data from path-level bidding controls to ensure ads get to the publisher. You’ve “saved cost” with a cheaper exchange, but your 0% take rate adds zero value back.
As the saying goes, you can’t improve what you can’t measure, so SPO is fueled by good data.
By knowing all the facets of the data story, including ROI and the quality of exchange integrations, marketers can have a real understanding of what is working and what is not. Shortsighted focus on only a part of the picture (like a blinding obsession with only getting the lowest fees) can backfire. Trust the data to show the way.
No Greater Asset Than Trusted Partners
Change is on the horizon for the advertising agency. Significantly more comprehensive privacy laws, like the California Consumer Privacy Act, and the imminent sunset of third-party cookies will make targeting challenging for many agencies — to say the least. While all that’s going on, new channels like over-the-top (OTT) and connected TV (CTV) are evolving quickly and beyond our wildest imaginations.
Brands must choose trusted partners with which to weather these changes. Agencies ready for a cookieless world, more privacy laws, and new and evolving channels will offer huge value in the long-term, for both sides.
In summary
SPO, in and of itself, isn’t really the solution. And all too often short-term SPO solutions that are overly focused on low-fees or “direct paths” to the publisher end up damaging the larger picture.
It’s all predicated on trust: your SPO strategy should be guided by trust through transparency, trust in good data, and trusted partners. In a digital ecosystem roiling with change and with more on the horizon, your long-term strategy must prioritize trust to drive efficiency, performance, and partnerships if you want to continue to grow and differentiate.
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