As programmatic trading has evolved, it has become less clear where revenues are flowing, what fees are being imposed and how auctions are being conducted. Supply path optimisation enables programmatic buyers to acquire high-quality inventory in a transparent way.
The spread of header bidding, which allows more than one ad exchange to bid on the same inventory at the same time, has made programmatic sales more efficient and raised publishers’ revenues. It has also undermined Supply Side Platforms (SSPs) by making them compete against each other, and in particular eliminated the privileged status of the SSPs that used to have first refusal on the inventory. The SSPs have responded by introducing undeclared variable price floors to make up for lost revenue. Demand Side Platforms (DSPs) have been flooded by multiple offers for the same inventory, creating a third, new auction at the publisher ad server after DSPs have submitted their final bids. These developments have created a complex supply path, allowing hidden fees and fraud to flourish.
The reality of full-stack integration
Some technology falls squarely on the sell side or the buy side, making its goal clear: sell-side technology exists to maximise the price and volume of impressions sold by publishers, while buy-side technology exists to automate and optimise media buying, maximising the value of the media dollars spent by clients, as transparently as possible. But as companies build out full tech stacks across both sides, it becomes less apparent whose bottom line is prioritised. Full stack technology can provide advantages, such as higher cookie matches and lower latency, but within a closed ecosystem it’s difficult to identify hidden fees, auction mechanics and if the path to supply being taken is in the buyer’s best interest.
Optimising the supply path
The days of targeting all exchanges in a DSP just for reach and scale are over. Supply is commoditised, and buyers need to thoughtfully target, optimise and review their inventory regularly. When reviewing their exchange partners, buyers should test the scale they achieve and how well they contribute to campaign goals, and end their relationship with those that do not meet expectations. The lowest-price inventory does not always provide the best value.
Brands and buyers can take several further steps to clean up the supply path.
First, they should stop dealing with any unauthorised resellers of inventory, as identified through the ads.txt standard.
Second, they should require SSPs to disclose the relationships they have with the publishers whose inventory they are reselling, and demonstrate the extra value they provide, whether through unique inventory or creative and data capabilities. Those that provide no extra value should be removed.
Third, they should cut out sources that do not disclose exactly how their auctions work, by flagging whether they use first or second price auction dynamics, for example.
Fourth, they should eliminate sellers that have undisclosed fees – those that list a final price for inventory but not the actual winning bid prices.
Fifth, by dealing directly with publishers they can agree viewability standard, transparent pricing and priority in bidding.
Supply-path optimisation is not a one-off event. Buyers need to review their relationships with platforms and publishers on a regular basis, to ensure that brands are getting the best available value from the best available inventory, as transparently as possible.
SIGN UP FOR ZENITH INSIGHTS