Time for programmatic advertisers to lean into the supply chain

Opinion

When brands need to make budgets work harder, leaning in to programmatic supply chain can save costs.

Many advertisers, at least for the foreseeable future, are using demand side platforms (DSPs) around the world to buy their ad campaigns.

In many cases advertisers have consolidated into a handful of DSPs and in others they use locally sourced solutions — inclusive of ‘managed services’ where the DSP isn’t unbundled.

Given the macro-economic climate we’ve found ourselves in, brands are needing to make their budgets work as hard as possible.

Typically, when thinking about programmatic, this has started at the agency and DSP fee level — prices that are visible on contracts that can be driven down or removed.

We could all spend hours debating how poor this practice is and bigging up the ‘media is an investment not a cost’ narrative, but sadly it’s true and I know many marketers are going through cost-cutting exercises right this second.

But are there other ways for advertisers to save costs without impacting their growth goals? Yes, and I’m here to argue it’s by getting deeper into the supply chain.

Caveat — I know complexity can seem boring and difficult, but below are some questions that probably arise when thinking about this and I’ve shared provisional/general answers.

Isn’t supply optimisation the role of my agency?

I’m a fan of agencies — they add tonnes of value and are often unheralded in doing so.

However, I don’t think it’s unfair to say that value generated deeper into the supply chain is rarely passed back directly to an advertiser.

Contractual complexities with auditing managed services and SSPs means they often aren’t required to share rates, incentives, or bonus structures.

Plus, we all know auditing this side of the supply chain is difficult to benchmark given how new this practice is (i.e what’s an accurate benchmark rate for an SSP or a managed service?).

Advertisers who are buying significantly in programmatic *must* lean into supply optimisation initiatives deeper into the supply chain, even those with an agency, to make large economic gains. The starting point for this is partnering with a handful of carefully selected SSPs.

Is it worth the effort vs reward?

In my career there’s been a lot of complexity which has been at juxtaposition for demands of simplicity, oftentimes it’s easy to decipher complexity in terms people understand, but the programmatic supply chain is a complex beast. There’s no avoiding this, even with pithy anecdotes.

Vendors, formats, SupplyChain object, Sellers.JSON, take rates, post-auction discounts, devices, header bidding, SPO, sustainability, ads.txt, suitability etc. So much to consider!

I’ll say it again though — advertisers who are buying significantly in programmatic *must* lean into supply optimisations initiatives deeper into the supply chain to make large economic gains.

Should I use supply chain tech vendors?

There’s a cottage industry of vendors who are helping brands to visualise and optimise their spend in the programmatic supply chain.

Continually we see industry-wide studies report alarming numbers (after lengthy processes), but there are steps any advertiser can make, and often those are made doable by SPO tech companies — but beware of those that oversell and underdeliver.

Conclusion

The economy is tough for most advertisers. No marketer wants to be having conversations with their suppliers about cutting budgets, but there are easy steps to be made by getting deeper into the programmatic supply chain for those that spend heavily in it — and this can start with prioritising SSP partners and having the rest of your programmatic stack navigate around them.

In summary, advertisers who are buying significantly in programmatic *must* lean into supply optimisations initiatives deeper into the supply chain, even those with an agency, to make large economic gains.

Wayne Blodwell is founder and CEO of TPA Digital, a digital advertising consultancy