Now is the Best time to do your supply path optimisation.

Supply Distribution

The COVID has created unprecedented impact on world economy and adtech has not been untouched. Most of the world in under lockdowns. People are consuming content online, much more than that in Jan 2020 . Every one is looking for virus news, keeping an eye on market, government efforts to contain the pandemic and of course working from home 🙂

This has created a glut in digital ad supply. On the other hand , money has evaporated from market. Brands are not spending, agencies are delaying the payments , credit cycles are lengthening and CPM’s have plummeted. Publishers , who were already under revenue pressure are now feeling the rock bottom of revenues. To make things even worse, Brand suitability concerns forced the demand side to restrict monetisation on COVID content , which was the most searched and sought topic.

How does Bid supply chain works ?

As mentioned in previous post , publishers end up working multiple SSPs and exchanges . These publisher partners are connected through various tech stack like HeaderBidding , Parallel bidding , Open bidding , price priority and other formats like S2S oRTBs.

More often than not , all the exchanges that publisher has signed up with are plugged in simultaneously to all the stacks . This means that an ad request can technically be routed though all these parters and stack combinations to same DSP .

For example , if one has Open bidding , prebid.js, Amazon TAM as tech stacks and has 5 SSPs , then 3×5 = 15 bid requests are generated for each impression . If each SSP is connected to 3 DSPs , then each of the 3 DSPs Receive 15 bid requests for every ad request fired from the page.

That is – 45 duplicated requests to deliver just one impression. Each DSP then evaluates each of the 15 requests. Not a good math at all for tech vendors and DSPs.

Why should publishers care about bid supply chain ?

Bid life cycle & processing and Bid Duplicity concerns have never been a priority for publishers. And why should this be publishers' concern anyways ? Publishers are hardly informed or kept updated by tech partners. Most DSPs rarely connect with publishers and the entire monetisation flow is a non transparent process for publishers till an impression is recorded as delivered 

However, truth of the matter is that not every bid is equal and nor is treated the same by DSPs. While SSPs, theoretically, should try to sell the inventory ad highest price, DSPs technically are pivoted to buy the same impression at the lowest cost. If your floors for given SSP + stack combination are lowest, dsp will buy at that floor , lowering publishers revenue. It is also a distant possibility that an SSP, which is plugged into multiple tech stacks, may pick your inventory from lowest cost stream and sell at a std pricing , making a hefty margin

Millions of bids per second and mostly duplicated take time to be evaluated adding to bid response times, which in turn leads to lower coverage and fill rates. This directly impacts publishers revenue. With COVID generated supply glut, this volume has reach epic proportions , creating multimillion dollars of server costs for DSP’s and SSP’s and adding to depleting revenue for publishers

for every $100 spend by advertiser, seller only gets $45 – $60 approximately.

Additionally, publishers use multiple intermediaries and resellers. this adds to duplicity volume but also reduces the net to publishers as explained in the linked post

What is SPO?

SPO is really a simple concept, similar to channel management and avoiding channel conflict. It signifies how efficiently your wares reach the Buyers. For a publisher, it translates to : For a certain kind of adrequests only the best SSP should be contracted.

why is this the best time for SPO?

As of Now , in April 2020, The Adtech industry is in a slump. May is not going to be any better. Publisher programmatic revenues have taken a hit like never before. Arguably, most pubs are lowest point already on CPMS and revenues.

Update: May 9,2020

The Trade Desk Suppresses Bid Duplication Amid COVID-19 Traffic Surge

So here you go. A much better substantiated story.

As mentioned above, how the supply reaches a buyer makes whole lot of difference on how publishers inventory is valued. to keep Supply clean SPO efforts are required at publisher’s end. As you will go through the Post further, you will realise that SPO requires some work depending where you are right now.

Publisher may need to update how they pass supply and monetise it. On a usual day, these corrections may cause fluctuations on publishers revenue runrate and raising target risk , which makes it harder to execute them. However, when publisher revenue is at lowest , the down side or revenue risk becomes range bound.

Then, what better a time to fix the broken windows than now ?? In fact any fluctuations that arise due to supply route changes may not even register since demand flow has reduced to a trickle. Fixing the Supply pipes and paths may empower you to demand better coverage at better rates , when the markets start opening up.

Supply Flow by inventory type :
  • As mentioned above , multiple ssps and bidders are allowed to buy inventory through different type of integrations , simultaneously.
  • This should be avoided as far as possible . That means you should clearly identify based on historical data, market research and speaking with demand partner, what works best.
  • Your goal should be to identify best suited demand partner for each type of request like Mobile + banner , Desktop + Preroll, App + native combinations .
  • Once done, you should configure your adserver such that Only designated SSPs should be allowed through only selected seat ids for a given supply combo.
Supply Authorisation through ads.txt

ads.txt is a very potent tool and should be adopted by every publisher. ads.txt ensures that as a publisher you know who is selling your inventory . To a buyer , it is a measure of confidence that a SSP or network is selling the right product. Though it is not fool proof, it goes a long way in building hygiene . In fact , today many exchanges do not allow trade on your inventory if have not implemented ads.txt.

  • The supply authorisation through ads.txt should be thoroughly scrutinised.
  • The resllers of same demand partners should be limited so that duplicity can be avoided and margins protected .
  • If you are a large publisher, Sign up directly with all the exchanges and SSP’s while removing resellers for these partners from ads.txt .
  • If you are a smaller publisher such that Big boys dont talk to you, then ask the resellers on their association with SSPs, Take rates, QOPs and How they would access your supply ? Pick the one that is most convincing or at the max a couple of resellers for each exchanges
About Demand Integration.

How a demand partner access your supply says a lot about the capability. In a nutshell, Tag based integrations are now frowned upon. Every DSP and therefore SSP, wants access to clean supply with minimum hops. tag based integrations allow deviations to this expectation. More adamant a partner is for header bidding, Exchange bidding or API integrations, better are your chances to get fair prices for your inventory.

It is dynamic industry that is evolving rapidly. new tech and fresh concepts at debated and executed every day to over come the challenges of making programmatic a more transparent echo system. It is a fun place to be in, if you like to ride.

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