How Advertisers Are Untangling the Programmatic Supply Chain

While the early phase of sorting the wheat from the chaff involved decoupling from fraudulent players, marketers are now adopting a more nuanced approach focused on financial transparency.

The dawn of the ad-tech era has ushered in a massive surge of digital media revenue with a corresponding volume of new players. With thousands of ad-tech middlemen littering the landscape and seemingly more entering daily, marketers are quickly realizing the need to be smarter about the outfits they partner with.

Enter supply-path optimization, or SPO, which translates to cutting through the clutter between media buyers and the publishers they work with. This was one of the hot topics at Adweek’s NexTech Conference, where Adweek reporter Patrick Kulp discussed supply-chain management techniques, including some of the latest clean-up efforts.

“Three years ago, it used to be about cutting out fraud; now it’s about looking at the intermediary positions that players like SSPs [supply-side platforms] are playing,” said panelist Amanda Martin, vp of enterprise partnerships at Goodway Group.

She went on to explain how brands and buyers are realizing their limited visibility into the partners they’re working with.

“This isn’t about looking for something obfuscated, but it’s about taking a magnifying glass to bids once they leave the DSP,” Martin added. “There’s a lot happening beyond that top reporting layer that you should know about; there’s wrappers, exchanges and validations.”

Martin spoke alongside Jamie Byrum, head of programmatic media at insurance giant Nationwide, and Chris Kane, founder of consultancy firm Jounce Media. They likewise shared their ideas about how to bring clarity to the supply chain.

Right now, the so-called “ad-tech tax”—a phrase adopted to name the marketer dollars siphoned off by middlemen, rather than going directly premium publishers—has been estimated as taking 60 cents of every programmatic dollar.

While slimming down the number of middlemen in a media plan might seem like a no-brainer, it’s actually been somewhat contentious in the world of ad tech, particularly for those at the tail end of the advertising supply chain.

Publishers and exchanges have long felt the push to load up on the maximum number of demand-side partnerships possible and might balk at the idea of cutting out those networks.

This push and pull between the buying and selling sides could lead to serious conflict. “I hope this doesn’t feel adversarial,” Kane said. “This isn’t about buyers outmaneuvering publishers; this is about working together more efficiently. We need to reframe the conversation around that.”

Byrum added, “It’s not just about keeping communication open with ad tech partners. We need to think about it as an internal effort, as well as external.”