Highlighting the Vital Role of the SSP in Programmatic Efficiency

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By Pierce Cook-Anderson, Country Manager UK and NL, Smart AdServer

The programmatic ecosystem is under much-needed scrutiny following the publication of the Programmatic Supply Chain Transparency Study, which mapped the supply chain from end to end.

The study – carried out by PwC in association with the Incorporated Society of British Advertisers (ISBA) and the Association for Online Publishing (AOP) – reveals just over half of advertisers’ programmatic spend reaches publishers. Around 34% is distributed in a traceable manner between participants in the supply chain, such as media agencies, demand-side platforms (DSPs), supply-side platforms (SSPs), data-management platforms (DMPs) and brand safety or verification providers. This leaves 15% of spend unaccounted for, a so-called unknown delta.

The study’s results support the case for increasing transparency in the programmatic supply chain by promoting initiatives around traceability, eradicating arbitrage and hidden costs, and simplifying the ecosystem by eliminating participants that don’t add value. And, with the latest IPA Bellwether Report highlighting the extent to which marketing budgets have been tightened across the board, efficiency in advertising has never been more crucial.

But, in a bid to rationalise and optimise the programmatic supply chain there is a real risk of tarring all adtech and martech players with the same brush, and assuming almost half of all ad spend is currently wasted. In reality, the majority of participants in the programmatic ecosystem bring real value and enhance campaign performance by improving targeting, increasing operational efficiency or enabling measurement. There needs to be a clear distinction between unnecessary intermediaries that take a cut without delivering anything in return, and those that are essential and bring real value. SSPs are a great example of the latter.

The value of SSPs for publishers

On the supply side, SSPs operate tens of billions of advertising auctions each day, allowing up to a hundred different demand sources to compete within a matter of milliseconds to ensure the best impression price for the publisher. This process requires technically complex connections between SSPs and DSPs in all formats, across all media and distribution channels, as well as specific expertise in engineering, data science, and infrastructure. This extremely sophisticated ecosystem, although not impossible, is very difficult for publishers to replicate and resource in-house.

The supply side also benefits from many additional tools and services which are only viable when they are provided by an SSP and shared by a large number of publishers. These include revenue collection and cash management to deliver shorter payment terms than those practised on the buy side, and advice and support in making the most of inventory or implementing industry standards such as ads.txt, sellers.json and SupplyChain Object.

The value of SSPs for advertisers 

Of course, SSPs also deliver value to the buy-side. By pooling inventory from multiple publishers, SSPs give advertisers access to very wide and diverse audiences, often larger than those of the major social networks. Advanced targeting tools enable advertisers to reach specific audience segments, or to deliver their ads in contextually relevant and ultra-targeted editorial environments.

Ads can be placed within premium inventory with advertisers able to leverage the most appropriate format channel and purchase model to meet their specific campaign objectives. Also, SSPs provide sophisticated yet intuitive interfaces for real-time campaign monitoring and reporting, enabling advertisers to optimise campaigns and achieve maximum ROI.

The necessity of standardisation 

Rationalisation and standardisation within the existing programmatic ecosystem are essential to increase transparency and efficiency. All participants must be able to identify the partners they work with and understand their position in the chain, how they are connected to other players, and the fee structures or payment models in place. Complete transparency is required to reconcile value along the entire chain from advertiser to publisher, with each participant able to demonstrate the value they add. While this process will inevitably mean weeding out the bad actors, streamlining the ecosystem, and eliminating unnecessary costs, it will also mean recognising the true value of the services provided by essential intermediaries – such as SSPs – and being prepared to pay a fair price for those services.

The Programmatic Supply Chain Transparency Study demonstrates a need to rationalise the ecosystem, and in particular to close the 15% unknown delta. Hopefully, it will act as a catalyst for change, enabling a move towards a fully transparent, more efficient ecosystem. But while inefficiencies in the supply chain are identified and removed, essential services and operations also need to be recognised and their true value acknowledged to enable a more effective, efficient, and open ecosystem for the future.

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