Thought Leadership

Is 2019 the Tipping Point for Supply Path Optimization?

December 12, 2018
By Adam Soroca, Head of Global Buyer Team

Illuminating what lurks in the ad tech black box remains a regular topic amongst the industry leaders and the press as we roll the calendar forward to 2019. And while programmatic spend continues to grow, this looming distrust prevents buyers to go all in on contemporary programmatic buying. Fortunately, the recent transparency movement stands to build buyer confidence through curating efficient, transparent programmatic partnerships while establishing clear industry benchmarks.

Historically, buyers evaluated inventory at the publisher (i.e. CNN) level, regardless of the pipes that delivered those impressions. With header bidding opening access to virtually all publishers via any supply source (exchange), the spotlight now shines on each inventory route’s business and technology practices.

Enter Supply Path Optimization (SPO), the practice whereby buyers deliberately choose specific supply sources. While the SPO structure remains loosely defined, buyers generally seek efficient and transparent routes that lead to optimal outcomes. Primary drivers tend to cluster around inventory quality and scale, pricing and auction mechanics. Gaining clear understanding of such crucial information relies heavily on the relationship buyers establish with supply partners.

Rubicon Project’s buyers tend to fall into two personas, ranging from big picture strategy to campaign fulfillment. Those include:

  • DSP Partnership Managers and Agency Programmatic Leads
  • Agency Media Planners and Traders, DSP Managed Service Teams and In-House Brand Programmatic Leads

Each key constituent embodies their own particular transparency needs.

DSP Partnership and Agency Programmatic Leads

These are the overarching stewards for supply strategy and partnerships for their organizations. Once charged with on-boarding and maintaining as many supply partners as possible, their recent focus on doing more with fewer is palpable. Optimizing towards supply partners to ensure great outcomes for clients is their primary objective. Key criteria typically includes:

  • Overall Inventory Quality: How does inventory score for brand safety, direct publisher connections, fraud levels, ads.txt compliance and viewability?
  • Media Cost: Are CPMs competitive or inflated?
  • Auction Dynamics: Is the exchange clear on the way auctions are conducted?  Does the exchange offer tools to ensure buyers are not overcharged in first price auctions?
  • Total Take Rate: How much working media makes it to the publisher?

Ultimately, these are all key ingredients to delivering strong client campaign results.  Additionally, the supply partner operating principles are more important now than ever. The exchanges demonstrating clean business practices are likely to find themselves in the winner’s circle among this group.

Agency Media Planners & Traders, DSP Managed Service Teams and In-House Brand Programmatic Leads

These directors and hands-on-keyboard teams focus on fully delivering budgets that achieve campaign objectives. Simply put, they must spend the client’s or their own money effectively. Consequently, they seek information that relates to brand safety,  reach, and KPI performance. These planners and traders are concerned with questions like:

  • What is the inventory quality? What are the viewability scores? Will I have to deal with significant fraud claims?
  • Will my campaigns perform to meet campaign objectives?
  • Media Cost: Are CPMs competitive or inflated?
  • Auction Dynamics: Is the exchange clear on their approach to inform bidding strategies? Does the exchange offer tools to ensure buyers are not overcharged in first price auctions?

Up until very recently, the direct influencers over where dollars flow typically focused on publisher targeting and optimization. As path choice has become a real thing, this group can now turn its attention to favoring the supply paths that yield the strongest outcomes.

Do your exchange partners pass the “transparency test?”

While no ‘one-size-fits-all’ transparency test exists and the SPO playbook has yet to be written, assessing a programmatic supply partner’s commitment to buyer results is more important now than ever. We are on the doorstep of consolidation and buyers are choosing paths.

As I recently noted, it’s not just about asking the right questions; buyers should also follow through with their investment. If the industry is truly going to move forward, once the most transparent paths to supply have been identified, the money should follow. Ultimately, it’s the power of purchase that will most effectively push the media supply chain to adopt more full-disclosure policies and transparent practices.
For more info about Rubicon Project’s inventory quality, take rates, auction dynamics or other transparency topics, reach out to us at contact@rubiconproject.com.


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