Attributed to Janette Higginson, Head of Buyer Development, APAC at Index Exchange
In recent years, Supply Path Optimisation (SPO) has become a frequent topic of conversation within the ad tech industry. At its essence, SPO is a method for improving advertising outcomes by evaluating which technology and delivery partners drive the best performance for a specific buyer. Often, this means reviewing the number of partners that are involved in a particular supply or buying path.
Our industry is full of options, oftentimes too many options that add unneeded complexity to our ecosystem.
SPO is an increasingly popular method for creating a cleaner, clearer ecosystem. Whilst it’s not a catchall solution, successful SPO begins and ends with optionality, and understanding how buyers can achieve desired business outcomes by working with the right partners – and the right pipes.
Buyers and Supply Side Platforms (SSPs) forge trusted partnerships
For the first time ever, buyers are forging a closer relationship with SSPs and this new relationship is building trust in the ad tech supply chain – especially when the relationship is open and transparent with partners that are willing to put it all on the table.
And rightly so, buyers should be able to conduct audits on any of their partners, because when you put it all together, not all exchanges look the same.
Fewer pipes can economically push more value by taking less – buyers deserve choices, and there shouldn’t just be one option. Ultimately, the sweet spot lies in the ability to manage the perfect balance, because too many partners can rip the value of programmatic right from under all of us.
So other than this new found trust between the sell and buy side of the industry – what other benefits does SPO drive?
New Economic Models driving client cost savings
A buyers overall mission is to ensure that their working media dollars are maximised, and are funnelled directly into active campaigns. SPO works to drive just that, and uncover the inner workings of the supply chain, in order to allow media buyers to find the most efficient, effective and transparent path to programmatic supply.
Buyers are looking for exchanges – or pipes – that can bring efficiency to negotiations, provide fee transparency and reduce technical costs.
In today’s world, every exchange takes a fee from a media transaction but tomorrow, every exchange could find fees are a function of the buy and sell side commercial terms – we could simply move to billing based on fixed processing fees.
This could allow more flexibility to be afforded to us where buyers can get down to the raw transaction, a new economic paradigm that can materially change how transactions are processed.
It’s this type of thinking – this type of innovation – that is going to open buyers up to more optimisation, and the maximisation of working media dollars.
Speed & Enrichment
SPO is traditionally positioned as a purely economic factor, but speed and time are also an important currency. Once economics are taken out of the equation, the focus should begin on the end user in this case, the customer who wants more control.
Exchanges are all built to varying degrees but what makes up the infrastructure is what is important for success. If one path can move faster, it will ultimately make for a better user experience and earn more trust [and money] for a buyer and the brands they manage.
Once the above pillars are clearly established, an exchange’s pipes should increasingly find a path to enrich experiences beyond price-based commoditisation. All signals should be enriched with people-based signals for buyers to connect to something meaningful – the consumer.
Overall, a successful SPO relationship should drive efficiency not only on economic scale by driving more media dollars into active campaigns, but through speed of activation, auction and reducing friction.