Despite accounting for 90% of digital ad spend in the US alone, programmatic advertising continues to present a unique challenge in the relationship between digital publishers and advertisers. Namely, the constant pursuit of that ever-elusive sweet spot between lowest cost and highest value.
It’s a tale as old as commerce itself, but the technology that’s been developed in response to the shifting programmatic landscape has added a layer of complexity to the equation. From the advent of header bidding to the rising abundance of SSPs and DSPs, the ad purchasing engine has become elaborate; increasing the price and potentially limiting the reach of every impression.
Of course, premium publishers should seek top dollar for the solid-gold real estate that is their inventory. As third-party cookies continue to be phased out through 2024, advertisers will increasingly benefit from the engaged audiences that premium publishers can attract and the rich supply of first-party data that they collect. But work can and must be done to keep the process efficient and the revenue rolling in fairly, regardless of current trends. That work is called “path optimization” and the right approach can maximize value for publishers, boost ROI for advertisers and their brands, and promote longer and more transparent relationships between them.
In the Driver’s Seat: Path Optimization Explained
Simply put, path optimization is the process of making it easier and faster for compatible buyers and sellers to find each other and do business together in the programmatic space. There are two sides of the process: supply-path optimization (SPO) and demand-path optimization (DPO). While the end goals for both sides are similar, they are not the same. SPO follows the buyer and emphasizes the path to sale at the lowest possible cost. On the other hand, DPO focuses on the seller and the preservation of the paths that offer efficiency at the highest possible value.
DPO - Header Bidding and Real-Time Bidding
These days, the programmatic landscape has evolved to favor publishers with a strong DPO strategy that leverages every opportunity available to them. For instance, developments like header bidding have done much to help publishers earn highly competitive rates for their inventories. Header bidding has allowed publishers to greatly expand the number of exchanges that their ad space appears on at the same time. Also, it’s made real-time bidding (or RTB) the norm. Unlike the former waterfall bidding model, RTB allows publishers to prioritize the highest bidder over the largest potential yield.
More opportunities for buyers to bid generally means higher overall value for publishers to realize. But if it’s taken to extremes, it can have the opposite effect by negatively impacting the purchasing experience for advertisers.
SPO - Avoiding Extra Steps, Extra Time and Extra Fees
Programmatic advertising may be fast and effective, but it’s not without cost. Every bid that advertisers place costs a fee that’s set by the DSP doing the bidding. Consider that millions, even billions, of inventory bids are made every day, and it’s easy to see the impact that fees can have if buyers have to place more bids because sellers work through too many SSPs.
Extra steps can also put a time drain on the entire process. In an environment where ads are sold and served in the moments that it takes the end-user to load a single page, milliseconds matter. More supply exchanges mean more time it takes DSPs to find the inventory that brands need. That compromises delivery rate for publishers, affects ROI for advertisers, and may lead to frustration for everyone involved.
Check Your Blind Spots: Why SPO Matters to Publishers
At first glance, it might seem counterintuitive for publishers to give much thought to SPO if it could compromise their bottom line. But a little consideration for the other side can go a long way in the buyer-seller relationship down the road.
Reducing Bid Request Redundancies
Bid request duplication is a common speed bump for programmatic buyers. In order to get maximum value for their ad space, it’s possible for publishers to push multiple bid requests for the same impression across multiple exchanges. The idea is to leverage the volume and automation of DSP bidding in order to sell inventory at above-market prices. Though buyers are finding their own remedies to this tactic, including the development of DSP algorithms that actively block duplicate bid requests, advertisers generally incur more service costs and pathway clutter for their trouble. Not to mention that advertisers can potentially view this as a dishonest way of doing business.
Building Buyer Trust
Conversely, offering a clear and consistent path to purchase that is priced fairly and paired with transparent data helps to establish a rapport with buyers, and sends a clear message that a particular publisher is trustworthy. This encourages repeat business and could open the door to more lucrative opportunities down the road.
Increasing Direct-Sold and PMP Potential
Some experts estimate the deprecation of third-party cookies will usher in a revival of direct-sold advertising and PMPs in digital advertising. In fact, some of our own research suggested that the time may be coming fast where advertisers and publishers will continue to utilize programmatic pipelines, but will once again rely on negotiating guaranteed deals that offer a consistency in price and reach. Positioning themselves as a trustworthy business partner in the here and now allows publishers to get ahead of this returning trend, and generate more revenue through guaranteed deals than they might have through programmatic advertising alone.
Shifting into High Gear: Why a Holistic Data Strategy Helps with Path Optimization
A solid DPO or SPO strategy must begin with a clear, complete and accurate view of the pathways that buyers take to reach publisher inventory. But this view isn’t possible without holistic data aggregation and reporting. DV Publisher Suite helps you collect and normalize that data across all of your advertising partners through powerful measurement and analytics tools.
SPO and DPO with DV Publisher Suite
DVPS streamlines the data gathering and aggregation process with the ability to draw from hundreds of data sources, each with their own individual piece of the story, and compile them into normalized and shareable reports and dashboards. For example, publishers can create a dashboard of demand partners that easily highlights inefficiencies and potential for optimization. Being able to collect, normalize, interpret and share that information, both internally as well as with buyers, goes a long way toward fostering the trust and transparency that is mutually beneficial to both sides.
Enjoying the Open Road
When the road is clear, it’s easier for everyone to get where they’re going. That’s a statement that anyone with a lengthy rush-hour commute can agree with, but it rings true in the programmatic advertising industry as well. The buyer/seller relationship can be a complicated one, but everyone has something to gain when they can transact as quickly, efficiently and transparently as possible.
DV Publisher Suite offers powerful solutions to help you with your demand path optimization strategy. Moreover, DV helps publishers build lasting relationships with advertisers and their brands by promoting transparency and providing comprehensive data and measurement to chart how ads are being served on publisher inventory.
Request a demo to learn more about how DVPS makes path optimization easier for publishers!