Why SPO Is First and Foremost About Driving Real Value in the Marketplace?

By Nicolas Mignot, Vice President, Publisher Sales & Strategy International, FreeWheel

In a programmatic advertising ecosystem populated with many intermediaries, supply path optimisation (SPO) needs to be a key area of focus to increase transparency and efficiency in advertising. Some players, however, have cut essential links and unique capabilities from the chain in the name of SPO.

While no side has been spared, certain publisher technologies including sell-side platforms (SSPs) have been caught in SPO’s crosshairs given their proximity to supply. The rationale behind bypassing SSPs is that it minimises complexity and reduces the associated fees, supposedly equating to higher publisher revenues.

But getting SPO right requires an understanding of which platforms and technologies deliver genuine value, rather than concentrating on disintermediation for disintermediation’s sake.

SSPs were developed to serve media owners’ interests

When automated media trading evolved, sellers gained the potential to tap demand from a wide variety of sources. To make the most of this opportunity, media owners needed an automated system that could efficiently manage and sell their ad inventory for the best price. SSPs were designed to address this need. Being able to access more demand across ad exchanges enabled — and continues to enable — sellers to drive competition, achieve significantly higher revenue, and maximise fill rates. What’s more, SSPs give sellers more visibility over which buyers they work with and the kinds of ads their audiences are shown.

As such, the purpose of SSPs is to help media owners streamline the complexity of the digital advertising ecosystem and unlock greater value from it. In the increasingly complex premium video space, these capabilities are more important than ever.

The rules of engagement for premium video

With premium video, both viewers and buyers have high standards when it comes to quality. AudienceXpress’ CTV Uncovered 2023 study found that 65% of European viewers surveyed watch CTV on their Smart TVs, making it a big-screen experience that supports large, highly creative long-form ads. Plus, more than six in 10 European CTV survey participants believe ads displayed in a TV-like environment are the most attention-grabbing, especially compared to social media environments (28%). It is critical for media owners to maintain the quality viewing experience, so they can continue capturing this unparalleled level of attention.

Ad buyers also have high standards for TV-like ad environments. For example, they are accustomed to the competitive separation, contextual relevance, and brand safety established by linear TV advertising. Furthermore, marketers consider the ability of TV-like environments to deliver higher ad effectiveness as the biggest driver of spend for this inventory, according to AudienceXpress’ latest marketer survey.

Media owners need technologies that enable them to address these demands, keep audiences engaged, and attract more budget from ad buyers. So, how can SSPs make this task easier for them?

The five factors media owners must consider alongside maximising yield

SSPs that bring true value to sellers in the premium video space need to be capable of delivering:

Operational efficiencies — Media owners want the ability to continuously sell their ad inventory at the best possible CPM. SSPs automate and streamline this process by determining which buyers have access to inventory, how much they can access, and through which buying channels. When the premium video landscape is diversifying, having a platform that simplifies media trading and ensures sellers make the most of every opportunity is critical.

Advanced audience targeting — AudienceXpress’ 2023 Advanced TV Uncovered study also found that marketers consider data-driven targeting methods the second biggest driver of spend for TV-like and premium video inventory. Advertisers and agencies are seeking to connect with desired audiences and deliver incremental reach, meaning media owners that facilitate these targeting techniques are more likely to attract spend.

Upholding regulations and requirements — Media owners can automate competitive separation, as well as be selective about what kinds of ads their audience view. Some premium video environments, such as broadcaster video-on-demand, are required to follow the same regulations as linear TV content. SSPs should be capable of doing the legwork for media owners, allowing them to define and meet their business priorities while maintaining compliance.

The viewing experience — TV and TV-like environments offer a unique viewing experience, which is typically big-screen, communal, and highly engaging. As this is a large part of why they capture so much attention, ensuring that advertising respects the quality viewing experience is vital.

Improving transparency — SSPs that help manage video metadata efficiently can better support media trading and transparency. Metadata tells automated systems about the context of premium video content; it allows these systems to prove how ad inventory matches buyers’ requirements, enabling sellers to attract further spend and drive competition. Metadata fuels stronger connections between supply and demand in a way that ensures audiences are shown contextually relevant ads that harmonise with the content they are watching.

Although SPO is a valid endeavour, simply removing an intermediary to cut upfront costs could in fact impact sellers’ ability to generate revenue, meet their business priorities, and overcome challenges within rapidly evolving spaces such as premium video. Industry players must therefore carefully consider the value of each link in the chain and the part platforms such as SSPs can play in developing the future of the advertising ecosystem.