Jounce Media founder Chris Kane gave a popular presentation at Programmatic IO New York on the buzzy discipline of supply-path optimization (SPO). In this episode, Kane comes into the AdExchanger studio for a deep dive on SPO and the ways advertisers can use it to optimize bid activity across exchanges.
“Buyers, to the degree possible, consolidate their buying through a single DSP,” Kane says. “The financial interest for sellers is the exact opposite … to partner with multiple ad exchanges.”
That complexity creates opportunities for the buyer, who can save money by studying the dynamic between exchanges and publishers. Turns out, certain exchanges are more likely to win a given publisher auction, irrespective of price.
“This is a very inefficiently priced market, which means there are pricing inefficiencies that as a buyer you can exploit,” he says. “You have to do a bunch of work to figure out how to exploit those inefficiencies, but what we consistently find across lots of publishers is there is one exchange that is a considerably better place to transact than all the others.”
But you need an information advantage. Specifically, advertisers should understand which exchanges are most likely to submit the winning bid on a given publisher placement. This is not as straightforward as you might think, Kane says, and it requires always-on monitoring to detect optimal demand paths to a given publisher’s inventory. (Full disclosure: Jounce conducts such monitoring, something we discuss in this episode.)
“For boring banner ads, all publishers work with all the same exchanges, and you start to realize that if I shut off Exchange B, I can still get all the volume I need for display formats by just transacting through Exchange A,” Kane says. “You can really quickly reduce the list of partners you work with as a marketer from 50 to certainly 10 without sacrificing any inventory access.”
Suggested pairing: After listening, check out the presentation slides from Kane’s workshop, “The Unabridged Atlas of Programmatic Supply.”