In anticipation of the Association of National Advertisers’ (ANA’s) study into the digital media supply chain, which is due to be published later this year, we’re writing a series of articles about some of the key topics we expect to be included in the study’s findings. We’re also giving our own perspective on those important subjects and explaining our approach to tackling them.
Our first article examined the topic of media quality and how buyers can maintain this by avoiding unauthorized resellers, implementing brand safety measures, and factoring in sustainability.
In this second post we’ll take a deeper dive into the ecosystem and explain how fully understanding the value of each element – whether that’s an agency, a data partner, a demand-side platform (DSP), or a supply-side platform (SSP) – enables transparency and maximizes efficiency.
Predicting the talking points
Although Matterkind was not directly involved in the forthcoming ANA study, we feel it is important to share our perspectives on the major themes we expect to see in the report and clarify what action we’re taking to address those important subjects.
One recommendation we do expect to see is that buyers strive to increase the percentage of working media that ultimately gets paid to publishers by eliminating middlemen and reducing fees across the ecosystem.
We are aligned with the spirit of this recommendation as it mirrors our philosophy of total-path optimization (TPO). However, we would caution that each component of the ecosystem is valuable and deserves to be paid for the services it delivers. Advertisers should strive to gain a better understanding of their specific adtech ecosystem, and the value contributed by each individual partner by applying TPO principles.
What is total-path optimization?
TPO is simply a way of ensuring brands are working with the best adtech partners to reach their audience in the most cost-efficient manner. You may be more familiar with terms like supply-path optimization (SPO) or even demand-path optimization (DPO), but TPO is a one-size-fits-all approach to the entire map.
Employing TPO involves applying some basic principles to the entire ecosystem of services and technologies that sit between an advertiser and its audience. These principles are:
- Vet all partners
- Eliminate duplicative or unsound actors
- Maximize buying power
- Achieve transparency
- Reduce fraud risk
Let’s take a look at how TPO can be applied to different elements within the ad tech ecosystem.
Buying partners: Agency and network tactics, inventory, and audiences often overlap, resulting in duplicative buying. To increase efficiency, brands can analyze overlap across media plans, use self-service platform buying wherever possible, and audit managed-service partners to ensure they aren’t straying outside of their briefs.
DSPs: The DSP space is crowded and complex, but advertisers can create brand and even campaign-specific scorecards to compare platform capabilities. They can also allow DSPs to compete against one another to see which achieve the best scale and performance for relevant channels and KPIs, and consolidate their spend according to the results.
Exchanges and SSPs: DSPs are typically plugged into dozens of exchanges, each with different fee structures and business practices, yet nearly identical inventory. From the supply side, publishers are incentivized to work with as many exchanges as possible to maximize their chance of selling their inventory. This results in a paradoxical cycle of duplicative auctions and DSP bid throttling that is bad for everyone involved, including the end user. The best solution to this is to have a strong SPO approach in place (more on this later).
Data partners: Sadly, the data industry is plagued by reselling, opaque naming conventions, and methodologies that artificially plump up segments. To combat this, brands should only work with trusted providers and avoid off-the-shelf segments unless they are confident in what they contain and how they are modeled.
Publishers: To avoid fraud and brand sensitivity issues across digital media, brands need a robust brand safety approach including curated block and allow lists, third-party ad verification partnerships, DSP targeting filters, and human monitoring of post-bid reporting. See our first article on the subject of transparency in adtech for more details.
Our baseline approach to SPO
As outlined above, SPO is an integral part of cleaning up the ecosystem. But we want to take a minute to further explain our internal approach to optimizing the supply side of the equation.
Each year our dedicated, full-time team of experts undertakes an exhaustive audit of the SSP landscape, issuing RFIs to the major players and scoring the results across a variety of categories. These categories include supported formats, exclusive partnerships, optimization capabilities, quality, transparency, and their sustainability efforts. We also look at how prepared they are for a cookieless future and the scale they can achieve across all formats.
Once we’ve completed this auditing process, we assign each platform to one of three tiers:
- Tier one – Recommended omnichannel SSPs for open exchange
- Tier two – Special use cases for private marketplaces (PMP), programmatic guaranteed, and certain formats
- Tier three – Partners to optimize away from. These are deactivated in our DSP seats to ensure our buying power is focused on our best partnerships.
We also offer custom supply-path analysis and optimization for clients interested in drilling down further into publisher and SSP combinations, based on their specific campaign needs and performance data.
The third and final installment in our article series about transparency in adtech will examine the subject of DSP seat ownership and outline the pros and cons of the options available to our clients. In the meantime, if you haven’t already seen it, why not take a look at our first article on ensuring media quality in digital advertising?