A recent study found that 95% of ad buyers are currently implementing or planning to implement SPO (Supply Path Optimization) technology — and 52% of ad buyers said that half or more of their advertising budget is transacted programmatically.
So, what is SPO? And how does it impact advertisers and agencies ?
Defining Supply Path Optimization
Supply Path Optimization is the strategy through which buyers look to remove redundant intermediaries and streamline their access to supply. There are many reasons why agencies and advertisers closely monitor supply paths, but the three main reasons are:
Compared to web SPO, mobile SPO has an additional level of complexity. This is because ads on mobile devices are facilitated mostly through software development kits (SDKs) — and understanding the type of SDK connection can have meaningful implications for optimizing that path.
The main players to consider for SPO analysis are the sellers, the exchanges, and the demand-side platforms (DSPs).
Starting with the seller — or app publisher in mobile — each app needs to evaluate and prioritize many sources of demand to optimize their yield. To do this, they work to integrate SDKs that represent the exchanges.
Understanding the type of SDK connection each exchange has with the app publisher can have major implications to how you as a buyer can think about prioritizing these partners.
To simplify this, there are three types of SDK partners:
All of these SDK partners, whether mediator, bidder, or traditional, are direct to publisher and can be seen in sellers.json and app-ads.txt as such.
However, behind these direct SDK partners also exist hidden intermediaries that are not integrated directly and resell the auction to other buyers. These resellers are exchanges or networks that add another auction to the programmatic chain, include additional tech fees, and provide zero visibility into where that impression opportunity originated from. As a DSP, you can look to identify and limit your buying through reseller channels as an immediate way to improve the efficiency of your SPO strategy.
In Part 2 of this series, we discuss how to make supply path optimization a priority for efficiency.
