Aligning your Supply Paths to your Advertising Goals

March 22, 2022 — by MediaMath    

There’s a lot of cat and mouse playing out in programmatic advertising. You may view Tom and Jerry as the walled gardens vs. the independents, SSPs vs DSPs, or Cookies vs. RampID, but there’s no shortage of one chasing the other in the hopes of convincing the industry (or worse, investors) where to put their money.

Supply Path Optimization is the latest zigzag the industry’s done as a response to the advent of header bidding, which itself was a response to Google’s dominance in market making. Publishers who implement header bidding code from an assortment of SSPs flood DSPs with duplicate versions of every bid request sent out. Supply Path Optimization helps DSP users sort and select the preferred path to buy from their favorite sites.

Over the past 4 years, buyers have gotten savvier in SPO. Agencies like Havas and GroupM use SPO to focus their purchasing energy onto a fraction of the total supply sources available. Preferred deals with fewer SSPs helps these holding companies improve negotiation.

How do they do that? How can I do that?

1. First things first, you need transparency. Make sure your DSP partner can provide log level impression data that aligns performance data with all media cost data – SSP fees, DSP fees, audience fees, serving fees, measurement fees – for all pathways. This holistic view of how not only a website performed, but how the supply pathway to that website performed is key to determining the next step

2. Throw some shade. Make sure you’re aware of how 1st price auction bid shading is applied in your DSP(s) and respective SSPs. This ingredient acts separately but can color your data analysis.

3. Find the winners and losers. Using your data, look for cost and performance trends that signal good paths and bad paths

4. Watch the hops. Your analysis may find that some direct pathways (only one SSP) perform the best and are fee efficient. BUT, you may find some indirect pathways (One SSP reselling through another exchange or SSP) actually are more fee efficient or perform better. Why? That’s like asking your biotech company how their seizure medication works: “we don’t really know how; the brain is a mystery, but it works”

5. Find your identity. As you collect winners and losers be mindful of any identity partnerships or providers that are integrated with your winners. You want to make sure that as cookies go away, your SPO decisions will be supported by the new 1st party identifiers your brand (or agency) uses

6. Start Blocking. Blocking is the logical first step in SPO. If there are pathways that are particularly expensive or underperform by more than the standard deviation you can use SPO tools in your DSP to block them.

7. Watch the Gap. Use your DSPs inventory management tools to monitor supply for any decreases in scale due to audience-matching and under-bidding.

MediaMath has all the tools you need to follow these steps and make intelligent SPO choices that perform. Our reporting will help you with steps 1-4. Our slick Supply Path Manager tools make step 5 easy, and our inventory management tools help with monitoring and tweaking your selections. And we don’t stop there. MediaMath uses SPO and performance grading to create unique markets you apply to specific use cases like performance, CTV, viewability as well as specific advertiser verticals like regulated industries or retail. Those same capabilities can be used to create completely custom marketplaces you curate yourself.

Whatever Tom or Jerry do next, MediaMath has the tools for you to win the cat and mouse game.