Publisher Supply-Path Optimization Matters. The Question Is, To Whom?

The Sell Sider” is a column written by the sell side of the digital media community.

Today’s column is written by Emry DowningHall, SVP of programmatic revenue and strategy at Unwind Media.

The Trade Desk’s OpenPath launch filled me with nostalgia. Header bidding early adopters would often speculate about the inevitability of a future where publishers plugged directly into DSPs for advertiser demand. In reality, the last six years have been dominated by regulatory changes, identity and bird-themed memes as publisher-focused ad tech and format innovations have fallen short of the momentum we had in 2015.

At some point, supply-path optimization (SPO) threw its hat into the ring as perhaps the most mysterious of conference buzzwords. To me, as a publisher that has spent 15 years in the open exchange, the SPO concept felt simultaneously ambiguous and important. The question was, important to whom?

The Trade Desk (TTD) has made it clear that it is not becoming a supply-side platform. But “providing advertisers with direct access to premium digital advertising inventory” is the catalyst for every SSP connection a publisher pursues. OpenPath is the third SPO innovation TTD has debuted – requesting a single supply path in 2020, GPID (Global Placement ID, which acts as a consistent representation of an ad unit across all exchanges and demand sources) and OpenPath.

Regardless of how it’s defined, OpenPath matters because TTD is once again moving SPO from concept to reality. If you believe SPO will become a dominant piece of all publisher strategy, this is an important announcement, even if you’re not in the OpenPath publisher launch group. (Ahem, still waiting on my invite for Solitaired.com.)

SPO is a big concept. But what does it practically mean for publishers or yield teams tasked with driving business KPIs? Though there’s no one-size-fits-all answer, I’ll share what I’ve learned.

Partnership cutbacks create teachable moments

In April 2020, fueled by a COVID economy, ad tech insolvency concerns and clawback clauses in most SSP contracts, we cut 40% of our partners and eliminated reseller lines from our ads.txt. The SSPs weren’t large revenue SOV contributors. And, in some cases, we weren’t even sure who to inform that they were being removed. It was an ad tech breakup with no one to receive the bad news. 

The move wasn’t a yield driver, but we saw no top-line KPI impact. Strategically, it was sound. We spent less energy analyzing exchanges that didn’t move the needle and more time on those that did. By driving additional revenue to our remaining partners, we mattered more to the SSPs left in our stack. 

It wasn’t until a few months later that I realized my mistake. I had failed to leverage the partners that we planned to keep to improve existing business terms. 

Our second round of consolidation had significant two-way partner dialogue and took much longer. The remaining partners were larger revenue contributors, and the low-hanging fruit had been picked. Internally, team members expressed valid concerns that this may negatively impact revenue if we consolidated too much. I remember wondering why SPO seemingly mattered more to me as a publisher than to my exchange partners. 

Did they know something I didn’t? Did this somehow conflict with their business model? How can we derisk our approach?

Negotiations with each partner differed slightly based on programs and capabilities. We requested a unified revenue share across all Prebid partners for the open exchange with improved terms for PMP. This was the critical element of consolidation, because unifying rev-share terms creates a balanced client-side auction, which is the cleanest way to evaluate partner performance. We didn’t try to drive rev-shares artificially low. We took our lowest existing rev-share from a large exchange and requested that partners outside of that match terms. 

We also tried to identify differentiated value outside the open exchange with each SSP. We researched what we believed to be our partners’ unique strengths and asked to be included in these programs. We had conversations to define unique revenue flowing through the SSP’s pipes, tracking and driving mutual growth.

The need to define SPO strategy

I wish this experience yielded a blueprint for publishers to follow, but that’s not the reality. While we saw no negative impact to top-line performance, it’s possible (likely?) that less bid density was offset by more favorable partner terms. But breaking even still felt like a win since we were more strategically connected with our remaining partners and had a balanced open market revenue share for all Prebid connections.

I have little doubt that SPO matters. But I recognize publisher strategies present very different goals and realities. I recently began a new role and took over a stack that hasn’t taken the same approach to SPO that I have historically. Despite a great audience and strong advertiser KPIs, I anticipate moving from “pipes to partner” will be more challenging due to less scale making my strategic SPO decisions tougher.

My plan is to take an iterative approach, beginning with careful partner evaluations, understanding and recognizing contributions beyond net revenue. Consciously defining this path today extends your runway and flexibility for testing. Publisher SPO doesn’t mean the fewest possible partners or the cleanest ads.txt. But it should be an intentional strategy that you own. 

I have no doubt SPO investments will matter. I just can’t say when. 

Follow Emry DowningHall (@EmryDH) and AdExchanger (@adexchanger) on Twitter. 

Enjoying this content?

Sign up to be an AdExchanger Member today and get unlimited access to articles like this, plus proprietary data and research, conference discounts, on-demand access to event content, and more!

Join Today!