There is More Than One Path to a Successful SPO Strategy: Enabling Flexibility and Performance Requires Brand-Publisher Alignment

April 29, 2020 — by MediaMath    

In a conversation with Rubicon earlier this year, our CTO/CPO Wil Schobeiri described our supply path optimization efforts (SPO) as “a fundamental component of ours.” We were the first DSP in market with SPO and remain the only DSP that takes a comprehensive approach to active supply chain management.

Our SPO work in 2018 focused on cutting out unnecessary paths and fixing the foundational commercial and technical issues in the media ecosystem as we prepared for the launch of SOURCE. Our advertising clients and agency partners benefit from the modernized commercial terms outlined in SOURCE that hold each partner contractually accountable for providing incremental value within the ad tech supply chain. We also hold them accountable to implementing the technical standards buyers require in order to provide them transparency into price, partners and the purposefulness of ad spend across all ways in which they access media through our platform.

As we continue toward our commitment of building a 100 percent accountable, addressable and aligned supply chain this year, we are focused on strategically optimizing supply paths. Our approach puts the onus on providing flexibility and driving performance for brands. To achieve both, it is important that we optimize the supply chain using intelligence and data.

In words straight from our CTO/CPO Wil Schobeiri, “To successfully redesign our supply chain, we must start from a place of mutual support for both the buy and sell sides. Over the last year, we’ve been working directly with publishers and their SSP and technology partners to gradually migrate supply over to modernized infrastructure that removes the burden of non-value-added intermediaries and opaque arbitrage, which results in increased revenue efficiency for publishers. We’ve found that the publisher community has been very receptive to this approach. We’re approaching this problem as a form of game theory—if publishers and advertisers work with each other, the collective result is more sustainable in the long term than if we maximize our local outcome at the expense of the industry.”

We approach our SPO and bid de-duplication efforts with fundamental data analysis and machine learning techniques. We use the outcome of this work to strategically reduce paths that provide low incremental value to our advertisers, resulting in better ROAS for clients and lower algorithmic complexity and trading overhead while maintaining stable publisher revenue. The result is a supply chain of optimized paths in which our clients can still customize to implement their own approaches to SPO, rather than being forced into buying via a single path. This approach has benefits for publishers and SSPs, too, whose needs we consider on a per-partner basis so they can maintain revenue opportunities and help shape a more transparent, efficient supply chain.

As we evolve SPO functionality over time, we expect buyers and sellers to see improved performance across both brand KPIs and publisher revenue goals. We will continue working to strengthen overall business relationships between MediaMath’s brands and their top publishers. In SOURCE, we are committed to creating an environment in which “a rising tide raises all boats.” A vibrant internet economy requires a successful publisher community, and we’re doing our part. We take our cues from the publisher, SSP, brand and agency communities, who are important design partners in the development of an ecosystem that is aligned towards providing positive marketing results for all.