SPO Is Evolving Thanks To Direct Publisher Connections And A Push For Sustainability

Supply path optimization

In a year marked by cautious advertiser spending due to economic uncertainty, supply line optimization (SPO) is a top priority for marketers.

By 2022, most SPO solutions revolve around establishing direct connections to so-called special publishers.

But machine learning (ML) and artificial intelligence (AI) also played a bigger role in this year’s SPO. Vendors have developed custom algorithms designed to optimize the cost towards media that proves to drive the brand’s chosen KPIs.

And 2022 is the year that the advertising industry begins to call SPOs the choice of options for marketers focused on sustainability. Instead of simply increasing the return on advertising costs, marketers can reduce the emissions produced by calling duplicate ads of programmatic ads.

Direct connection

Trade Desk (TTD) dominated this year’s SPO conversation with the debut of OpenPath in February. Through OpenPath, publishers can work directly with DSP (via Prebid adapters, for example) without having to go through SSPs. As of May, TTD said the solution had added direct links to more than 100 specialty publishers.

While OpenPath has found many supporters, its critics have accused the TTD of encroaching on the territory of the SSPs and saw the move as a threat to cut off the SSPs from the entire supply chain. TTD has also been accused of abandoning its monopoly commitment to advertisers, as efforts to confront its publishers have been painted as a conflict of interest in how it serves the purchasing parties.

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TTD’s decision to disable Google Open Bidding, which allows SSPs to compete with Google AdX in Google’s ad server, suggests that SPOs can be used not only for efficiency, but as a tool to undermine its reach. Google. Other DSP providers, such as Yahoo and Amobee, have followed TTD’s lead and cut ties with Google Open Bidding.

But despite these fears, OpenPath has not completely changed the supply chain, and SSPs are still in its infancy.

TTD is not the only major player in the advertising technology that drives the SPO solution that revolves around direct publisher engagement. GroupM made headlines this year with the launch of its Premium Marketplaces offering more direct contacts with publishers in partnership with PubMatic and Magnite.

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The SPO also owns the CTV channel. For example, both PubMatic and Magnite announced a live CTV-focused partnership with Horizon Media in November.

SPO and Sustainability

As SPO conversations have historically focused on lowering costs for advertisers, a new point has emerged in 2022: the need to boost emissions generated by programmatic bidding.

“Our partners are thinking about the most strategic investment for carbon offsets. [emissions] In the media supply chain, “Christine Foster, vice president of media operations at Kroger Precision Marketing, spoke at AdExchanger’s Programmatic IO event in October.

Software purchases require huge amounts of computer power. With interest often resold by advertising technology intermediaries or offered by many SSPs, there is a lot of waste that can be mitigated by smart SPO solutions or by creating more direct access to inventory.

Krzysztof Franaszek, founder of Adalytics, said: “There is a real global cost of buying through 10 supply lines rather than a single supply line for the same inventory.” “People have a moral and economic need to consider those costs.”

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Most advertising agencies aim for 80% visibility. But having 20% ​​of all ads displayed below the fold generates about 27,000 tons of carbon per year. Scope3 co-founder and CEO Brian O’Kelley said last October at Programmatic IO that if agencies increase their visibility standards by 10%, those emissions could be halved.

Custom bidding algorithms do not always have a clear location as an SPO solution. But as the visibility example shows, fine bidding can make branding decisions more efficient and sustainable. For example, it is possible to design custom auction algorithms that place higher bids on inventory with higher attention points.

The bidding algorithm can also use the carbon emissions of publishers and vendors as signals to determine green supply routes. Buyers can now consider not only optimizing away from inefficient supply chains, but working with more green vendors and reducing their own carbon emissions.

So as we head into 2023, look for sustainability to become a bigger part of the SPO discussion.


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