Supply Path Optimization, or SPO, is supply chain management for media buying. It’s a crucial part of running a successful business, but it can have detrimental effects on our environment.
The Issue with the Supply Chain
Did you know that serving only one thousand impressions can use the same amount of energy as running a load of laundry? It’s hard to imagine but programmatic buying is, literally, contributing to climate change.
Companies like Google, Criteo, and thousands more are running through physical servers; when you auction an ad, you’re spinning up these servers around the world, using energy and creating heat. The average RTB-enabled publisher monetizes through 28 SSPs (Supply Side Platforms), and authorizes 16 SSPs to resell its inventory. This creates cheap reach, but cannibalizes inventory. Not only does this create energy that contributes to harming the planet, it skewers ad performance and efficiency.
The ANA released a supply chain transparency study in December 2023. If agencies and brands were not already thinking about SPO, our guess is they will be in 2024. The study found that 1 in 4 dollars spent on the open web were wasteful or unproductive.
The Buying Landscape
There are many ways to buy media digitally and programmatically. You can buy directly with a publisher through an IO deal. You can create a programmatic guaranteed or private marketplace deal in your DSP. Or you can buy on the open exchange. You can also do a combination of all of these things.
The worst option, in our opinion, is to buy the open internet via an open exchange with no parameters in place to optimize the supply path. It’s a messy, lazy buy because of the cannibalization and competition created amongst many SSPs, some of which are not quality inventory.
SSPs are paid by the publisher. Publishers can work with all the SSPs they want. Multiple SSPs bid against each other for the highest bid. Some SSPS do not add value, but create waste. If you have a direct buy and a programmatic buy going at the same time, but you haven’t ensured the direct buy sites are excluded in the programmatic buy, you’re likely bidding against yourself.
Our philosophy at Mindgruve is to find the most direct, cost-effective and fastest path to supply by consolidating SSPs and partners.
Not all DSPs are created equal. Mindgruve continuously evaluates the space and chooses partners committed to marketplace transparency and quality.
How to Optimize the Supply Path
First, have your team or agency pull the data regularly to ensure you know what you’re buying programmatically. This may involve using the DSP reporting options or tapping into analytics resources to evaluate log-level data consistently. Evaluate what SSPs and sites are performing well and which are not, based on your KPIs. Eliminate MFA sites.
Block sellers whose inventory fails to meet viewability (and ideally attention) thresholds and/or sellers who are not adding value to your buy.
If you have buys with multiple DSPs or partners, ensure you’re monitoring for overlap.
Prioritize PMPs and Deal IDs in your DSP. Utilize whitelists of sites. Monitor for fraud using a partner like Doubleverify, Moat or IAS.
Mostly, ensure your marketing team is aware and has a plan for SPO in 2024.