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How To Craft An Effective Supply-Path Optimization Strategy

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As we undergo major shifts in digital advertising, the evolution and sophistication of programmatic strategies continues to redefine the landscape. Understanding the intricacies of supply-path optimization (SPO) is key to unlocking unparalleled efficiency and value.

Advertisers and agencies, specifically, are recognizing the importance of SPO to select strategic SSPs that reduce the number of intermediaries, offer more control and align on better financial incentives and greater cost savings.

Ultimately, advertisers must make their own choices, but let’s explore the factors that can help shape their SPO strategies.

Reducing the number of intermediaries

SPO acts as a guiding compass, enabling advertisers to navigate through the supply-chain labyrinth and identify the most direct and cost-effective paths to publishers and supply. By eliminating unnecessary intermediaries, advertisers cut down on the number of hops an ad impression takes before reaching the desired audience.

This reduces operational complexities and provides more transparency, empowering advertisers to make more informed decisions and strategically allocate budgets to maximize the value of their advertising spend.

Gaining more control

Advertisers want more control of their campaigns to ensure optimal performance and resource allocation. Factors like auction dynamics, bid response times and overall transaction processes enable advertisers to tailor their strategies to specific campaign goals and unique requirements of different media formats. Advertisers need to think about the different media formats they plan to use for a campaign when evaluating SSP partners.

For instance, CTV advertising requires that SSP partners have advanced capabilities in delivering seamless, high-quality content to large screens, which differ from traditional online video advertising. Advertisers must carefully consider the strengths of each SSP to ensure campaigns align with the characteristics and requirements of the individual media formats.

Having a partner with omnichannel capabilities and access to multiple formats, including CTV, video, audio, and more, will be advantageous to advertisers.

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Aligning on financial incentives and cost savings

Effective SPO involves collaboration with partners who share a commitment to transparency and fair financial practices. Advertisers must carefully assess partners based on their fee structures.

SSPs need to reduce unnecessary fees and provide favorable pricing to help advertisers increase the overall value of their advertising investments. These cost savings become a driving force behind SPO, enabling advertisers to optimize their budgets strategically and invest in higher-quality inventory.

Building stronger partnerships to maintain a competitive edge

SPO encourages collaboration and transparency within the advertising ecosystem. Advertisers and their SSP partners must work together to optimize the supply chain for mutual benefit, aligning the interests of all stakeholders toward common goals of efficiency, transparency and campaign success.

Supply-path optimization stands as a linchpin strategy for advertisers navigating the complexities of programmatic advertising. A strong SPO strategy empowers advertisers to make data-driven decisions, mitigate risks and adapt to the ever-changing landscape of digital advertising.

Embarking on strategic SSP partnerships is not just a best practice. It’s a strategic imperative for those seeking to unlock the full potential of programmatic advertising.

Selecting the right SSP partners is crucial for advertisers. Microsoft Advertising understands the intricacies of SPO and can be your strategic SSP partner in navigating the dynamic world of programmatic advertising.

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