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Digital marketing has advanced at a transformative pace in the past two years. At the center of this transformation lay programmatic, the technology that enables advertisers to reach their audiences through multiple digital touchpoints and at scale.
According to Integral Ad Science’s latest research, over 50% of media experts say most of their digital advertising budget is transacted programmatically. Come 2022, the technology is slated to claim a larger share of digital ad budgets, with formats such as CTV, OTT and audio gaining traction. Industry experts expect programmatic investment to dramatically grow in the coming years due to the benefits of automation, real-time measurement, sophisticated targeting and optimised ROI.
However, expanded access to programmatic means multiple paths to the same ad inventory, resulting in increased complexity and ultimately – a wider gap for ad fraud.
New platforms and new challenges
In 2017 the issue of wasted ad dollars was highlighted by one of the largest global advertisers P&G, when it decided to cut its digital ad spend by $200 million, only to notice no significant change in business outcome. That was followed by other prominent advertisers like Chase and Uber, across programmatic and mobile respectively, arriving at similar conclusions. Even though we have come a long way since then, lack of transparency in the programmatic ecosystem and supply path continues to be a crucial challenge for advertisers.
Today, as newer and more lucrative mediums come into play, advertisers are tasked to manage more inventory and get involved in multiple auctions. This significantly increases adtech tax and overall supply chain cost. Research indicates that more than half of publishers operate at least one supply path that experiences transaction failure.
Therefore, it only makes sense for brands to demand better transparency of the supply chain, to understand how and where their money is being used.
How can supply path optimisation (SPO) build the lost trust?
In simple terms, SPO resolves the problem of auction duplication while finding the most direct path to the ad inventory. It also provides detailed auction mechanics, auction level metrics and other data logs, achieving overall auction efficiency and transparency. Furthermore, SPO reviews are a great way for marketers to strategically select the partners that are known to provide value and are fraud-free while giving them a thorough understanding of what happens behind the scenes, before deciding to invest further.
A study by OpenX revealed that Indian marketer and agency participants are increasingly becoming more confident of SPO reviews with over 50% having run their first-ever SPO review over the last 18 months. As these tactics grow, ad buyers also indicated that they will boost their SPO efforts by working with external consultants or supply path verification technologies.
This surge in SPO can be attributed to several factors such as an increase in header bidding adoption by publishers, unauthorized reselling, changes in investment strategy, cookie-less environment and IDFA.
So, where does the responsibility lie? With agencies or brands?
To generate trust in the complex programmatic world, it is crucial for brands to know how each player is operating in the supply chain. This could be achieved if brands, tech partners and agencies come together to establish data sharing principles and standards to assist in the SPO. However, our research revealed that brands and agencies differ on who should take the responsibility for SPO and media quality. 47% of brands and 38% of agencies agree that brands are responsible for day-to-day SPO activities; by contrast, 29% of brands and 38% of agencies believe that agencies are responsible for these tasks. This disconnect underscores the importance of greater alignment between media buyers to fully achieve the benefits of supply path optimisation.
From a technology point of view, new solutions such as supply path curation and marketplaces are emerging. However, for SPO to accomplish its potential, industry players must unite to outline measurement metrics and transparency standards.
The way forward
SPO is a powerful way for buyers to control their buying paths and strengthen their supply relationships. The goal of SPO is for buyers to access the inventory that matters most to them – consolidating around the buying paths that are low cost and transparent, ultimately increasing their buying power. The first step to a successful SPO begins and ends with understanding how brands and advertisers can achieve their desired business outcomes by working with the right partners, and the right pipes. This way, buyers can level up their campaign outcomes and return on ad spend.
Further, in order to establish a more transparent, innovative digital environment, we have to start by clarifying the inner workings of the supply chain. Many buyers across the ecosystem are forging relationships with SSPs and exchanges for the first time ever. As a result, they have begun to build a more trusting relationship with programmatic players on the sell-side. The capacity to build trust with selected partners, to differentiate between transparent and non-transparent participants, is one of the many ways in which SPO can help boost trust and transparency.
This article was first published on Financial Express.
