Luca Bozzo, Senior Director, Strategic & Channel Partnerships, JWX
Advertisers are navigating challenging times, simultaneously facing an explosion of media touchpoints and economic uncertainty that impacts consumer spending. Meanwhile, duplication is another factor creating the illusion of a large supply footprint even as open web traffic shrinks.
Advertisers need to reach qualified consumers on channels that are likely to engage them while avoiding duplication issues, and they need to do so efficiently and effectively. Every dollar counts.
This is why supply-path optimization (SPO) has become such a dominant conversation point across the industry. In order to maximize budgets, advertisers are looking to cut out as many intermediaries as possible between them and the actual ad impression.
The trouble with SPO is that, for all the good it supposedly brings, many advertisers use it as a blanket strategy, ultimately cutting out more inventory than they may intend to. Successful SPO requires nuance, not blunt force.
A classification issue
Let me be clear: SPO is a sound strategy. Every buyer of media should pursue it. The issue comes in the execution. If we dig in even further, the complications begin with the overly broad classification of supply and technology vendors.
While SPO is about cleaning up the supply path, some practitioners advocate a direct-only approach, excluding inventory from all intermediaries. This uses SPO as an avoidance mechanism, broadly painting every intermediary as part of the “adtech tax,” or not worth further consideration.
Advertisers that follow the ads.txt spec to the letter will inevitably ignore critical use cases like unique data and signal or exclusive inventory and placements. A technology vendor who empowers publishers through robust technology solutions is viewed exactly the same as an SSP who resells undifferentiated banner placements.
If advertisers’ larger goal is to improve campaign performance, it doesn’t make sense to eliminate source-level partners. As Jounce Media points out, “not all indirect paths are wasteful reselling.”
Buyers must be advocates
There’s a clear solution to this problem, but it requires more effort. Buyers need to refine their SPO practices. That requires them to move away from simply checking the “direct supply only” box in their DSP and moving towards auditing their inventory partners. The end results will be worth the extra effort.
Every buyer needs their own unique supply strategy, similar to the way they create a bespoke brand safety policy. By taking a sophisticated approach to SPO, brands can look at partners that may not qualify as “direct” publishers, but actually offer the same (or better) kind of premium audience, inventory, and signal.
Questions to ask
- What am I really pursuing? SPO for SPO’s sake is pointless. SPO is a means to maximizing the amount of ad dollars going toward media, which in turn leads to better performance. In some cases, exclusive sellers represent indirect paths, but offer the inventory, data, and pricing efficiency needed to reach consumers and maximize campaign performance.
- What am I eliminating in my SPO plan? On that same note, buyers need to get a clear view of how SPO impacts their total addressable market. If eliminating certain partners shrinks the size of their targetable audience, is that helping them achieve their goals?
- Where can I adjust my strategy? Advertisers have the power to define what is a good fit for their SPO efforts. By evaluating and engaging with potential supply partners, they can bring previously excluded sellers back into the fold to ensure that they are achieving their overall campaign goals.
Overall, SPO is a step in the right direction. However, for it to be truly effective, standards need to adjust so that broad swaths of inventory aren’t cut out of media plans haphazardly. Buyers can take the first step in this process by taking a closer look at their SPO plans and asking the appropriate questions. When they approach SPO with nuance, they are likely to win across multiple fronts, ensuring that they are spending more on actual media while still hitting campaign goals.
