What is Supply Path Optimization? Why is it important for DSPs and SSPs?

The publisher has implemented header bidding for increasing bid; it permits an aggressive SSP to alter outcomes for both the publisher and the advertiser significantly. Header bidding is a more domestic and improved tech combination between Publisher and advertiser. It is a progressive programmatic technique. It is also called as pre-bidding wherein publishers offer inventory to quite a lot of ad exchanges instantaneously before making demands to their ad servers.

The idea is that by permitting multiple demand sources to bid on the same inventory at the same time, publishers rise their profit and make more money, but this results in a short-term gain for the SSP but long-term pain for the advertiser and publisher.

Previous header bidding, a publisher asked one SSP to bid. The Supply side platform first send out requests for bids, and after the value has been strong-minded, send a second question, which significantly increases the time it takes to serve an ad. Because of these reasons one new technology came, i.e. SPO. Supply-path optimisation gives media buyers the ability to bid on and win inventory at the most realistic price.

What is SPO?

Supply-path optimisation is an algorithm used by demand-side platforms. It refers to a moveable set of methods DSPs and SSPs use to find the bids most likely to win a sale. By increasing the possibility that a given request will win its free deal, SPO helps buyers avoid impressions they’re improbable to succeed, supply-side platforms that depend on reselling and duplicative inventory. SPO purposes to make the demand-side platform more resourceful in how they bid, which will help them lower costs and avoid shady SSPs. Rooted relationship with agencies and advertisers is the most important advantage for publishers engaging in SPO.

Methods of SPO:

These methods exist between DSPs and SSPs.

Manual Approach

This technique used to optimise bids for better performance and reduce costs. Buyers and DSPs take the manual approach. Manual SPO is about considerate how an advertiser can build healthier relationships with publishers, asking the question of how buyers can get their budgets to a publisher. Select sell-side tech that is transparent on both fees and auction dynamics, which increases ad performance.

Algorithm Approach

It filters bid requests and responses to increase production and reduce costs. The publisher’s role here in getting the DSPs and SSPs to play nice.  You need to push your SSP partners on how they are addressing SPO, what discussions they are having with DSPs and even agencies, how they are running and marketing auctions on our behalf, and what steps you can take together to reduce some of the pressure on the buy side.

How does it work for publishers and advertiser?

SPO brings DSPs and SSPs closer together; it should work to publishers’ advantage. There also needs to be higher transparency regarding how auctions operate like first price and second price so that buyers and sellers understand entirely each other. Supply-path optimisation objects to find the most efficient pathways to purchase an impression.

The supply-side platform has previously started using filtering SPO algorithms to send only the most relevant inventory to their connected DSPs. This technology saves us huge money on server cost. Effectiveness based on many factors, including the prospect of successfully winning a bid, the cleanest auctions. The supply side needs to require DSPs to pay to gain access to user queries which will reduce publisher latency and SSP bandwidth while increasing revenue.

Finally, the supply and demand side need to consider each other’s needs as we look to create a buying and selling ecosystem which is more efficient.