Supply Path Optimization (SPO) has received a lot of attention recently, and for a good purpose. According to a recent survey, the great majority (95%) of ad buyers are already using or want to use SPO technology, with 52% of them reporting that at least half of their advertising expenses are handled programmatically.

Advertisers, publishers, and agencies are increasingly looking for companies like Increase Rev. Because we assist our clients in streamlining the intermediaries, duplication, and inefficiency that drive up costs and reduce transparency by identifying and eliminating them. Which ultimately lowers advertising costs, improves user experience, increases ad performance, and decreases ad fraud.

Why wait, then? Get in touch immediately to take advantage of our products and services. We’ll work with you to optimize your supply chain using tools for automation, openness, and data-driven insights.

However, before digging into such type of advertisement, first, understand what SPO is in programmatic advertising and why marketers and organizations should approach it.

What is SPO Advertising?

Programmatic marketers have noticed a considerable rise in auctions repetition since header bidding became popular. It has long been standard practice for marketers to place bids on several ad exchanges to optimize scale.

They are discovering that many of those exchanges are attempting to sell them the same merchandise. The marketer may occasionally receive 30 or more bid proposals for the same impression.

Supply path optimization addresses this issue by locating and eliminating bidding duplication. But there are also other elements at work. Finding the “most direct” route isn’t the only goal of SPO. It also has to do with the obstacles you face on the way.

Each auction in which a marketer gets involved may have a separate set of fees, auction guidelines, and time constraints (known as “tmax” or the amount of time the exchange needs to finish the auction). Together, these elements increase the cost and decrease the predictability of advertising campaigns.

The “most direct” route to supplies was the initial aim of SPO. However, the term “direct” is vague, and it doesn’t deal with the issue of costs or speed.

What is programmatic supply chain?

The term “programmatic supply chain” relates to how technology and automation speed up and improve the purchasing and selling of digital advertising space.

To better comprehend and target customers, this involves automating the selection and positioning of advertising inventory and storage and data analysis. The objective of the programmatic supply chain is to increase the effectiveness, efficiency, and transparency of the advertising process for both buyers and sellers.

How Supply Path Optimization Programmatic Works?

Supply path optimization is an algorithm that lets the buyer determine the best and most direct path to a certain ad impression while reducing bidding duplication and ad inconsistency. The algorithm considers a variety of variables to optimize the supply path, including the inventory type (web, mobile, and application), ad viewability, expected performance, and geography.

Therefore, advertisers must first determine which of the numerous available techniques they wish to implement to use SPO. However, now that you’re aware of what SPO is in digital advertising, it is also essential to know that in the digital marketing supply chain, there are various ways for advertisers to optimize their campaigns, and Supply path optimization can be used in a variety of contexts.

To regain control and improve the route to publishers, media buyers can:

• Collaborate with fewer strategic partners and SSPs, and simplify the number of ad exchanges they use.
• Limit your offers to those that have the best probability of succeeding.
• Stop doing business with SSPs that forbid DSPs from taking part in second-price auctions.
• Eliminate long-tail SSPs (e.g., resellers).
• Stick with the vendors who have more exclusive stock to offer.

According to the simple rule, a given supply connection must provide unique value at any bidding. Doing this guarantees that every dollar you invest in programmatic advertising has the greatest possible impact.

The 4 Primary Benefits of Supply Path Optimization for Advertisers

Economic Management

SPO can maximize the impact of a buyer’s ad spend. By providing transparency regarding the expenses that different SSPs charge – the usefulness and productivity of the technology provider’s auction dynamics, the degree of direct ties with publishers, and whether the SSP is willing to provide customers preferable rates for consolidating spend.

Smart Concentration

Collective product innovation is, at best, challenging when each SSP connects with over 100 DSPs and each DSP collaborates with over 100 agencies. Agencies can shape the product trajectory, and SSPs are motivated to develop customized technologies by developing strong partnerships with SSPs.

Inclusive Insights

It’s challenging to comprehend a programmatic SSP auction. Real insights across several auctions cannot be gained due to the exponential complexity added with each new SSP auction that is reviewed. Buyers can boost their business operations by gaining visibility and better utilizing the available insights by linking spending on fewer programmatic partners.

Possession of Behaviour

Underhanded mechanics have too much room to grow in a complex ecology. Accountability is bred through simplicity, which is also the cornerstone of supply path optimization. Buyers can significantly impact advertiser ROI by compensating supply partners who consistently perform in their best interests.

What Makes SPO Important to Publishers?

Because of the interconnected nature of the programmatic advertising marketplace, what benefits advertisers also benefits publishers over time. A high-quality SSP obtains higher yields through media spend allocation and strong supply path optimization.

·         Reallocating media expenditures

With SPO, the publishers who offer great inventory value will receive the greatest yields. The money will start to flow away from the dishonest players that employ cunning and manipulative strategies.

The money will start to flow away from the dishonest players that employ cunning and manipulative strategies.

·         Greater and Better Yields

Supply path optimization is a strategy publishers use to generate a fiercely competitive market for their goods. Publishers with distinctive inventory have a better chance of increasing their worth and earning more from media sales.

·         Transparency and openness

Supply path optimization attempts to address the painful lack of transparency plaguing the Ad tech sector. Keeping track of an advertisement’s path from the advertiser’s ad server to the publisher’s ad unit is nearly impossible. The publisher may receive more advertising budget if the procedure is more open.

·         Minimized ad fraud

The risks of ad fraud inevitably decrease whenever the supply paths are reduced with fewer and trusted players. Longer and more complicated supply paths make it easier for scammers to scam the system.

Conclusion

Although supply path optimization may appear to be a strategy that benefits advertisers solely, it also helps publishers.

SPO’s algorithms train themselves to carry out the plan you’ve developed for programmatic advertising. But before you can put ideas into practice, you must assess your existing situation. After that, you can put the plan into practice and benefit from it.