Supply-path optimization, or SPO, is not a new concept.
SPO audits typically come in the guise of spreadsheets that are hundreds of cells long with requests for information (RFI) becoming increasingly familiar to ad-tech suppliers—especially as times become leaner.
While the consequences of the coronavirus pandemic have put a squeeze on ad spend and forced the industry to tighten its collective wallet, brands and agencies have been scrutinizing their programmatic supply paths since at least 2018 as part of an effort to track every dollar they spend and better understand where their digital ads run.
Teri Gallo, evp and general manager of marketplace at Kinesso, the marketing intelligence arm of IPG, said the goal of reviewing SSPs is to provide internal teams, clients and potential clients with a comprehensive, full view of the supply chain.
“Through our evaluations, we detail SSP offerings, value proposition, integrations, performance metrics, service levels, development plans, et al. All of this is done to provide an agnostic review of marketplace participants. This gives our teams the tools and resources they need to make informed buying decisions on behalf of our clients,” Gallo said.
Kinesso started its SPO process at its inception, in October 2019. Gallo said the SSP review, which is done in conjunction with the company undergoing evaluation, is an “ongoing practice” across IPG that progresses as the landscape and clients’ needs change.
One SSP said it received an RFI from IPG’s data-driven marketing unit around November. Another said it received the RFI earlier this year.
“The whole thing starts with, at a philosophical level, the recognition that there’s no need to transact through all of the exchanges that exist today,” said one of the sources involved in the audit, who requested anonymity due to the sensitive nature of their company’s relationship with IPG.
The initial purpose of an SPO audit is to whittle down the daunting number of exchanges on a given list of ad inventory suppliers to a core, or preferred, group of supply-side partners.
That preferred group is usually no more than 10 SSPs, and they generally cover the buyer’s bases, according to the sources. Left standing will typically be a small number of omnichannel SSPs, plus a combination of supply partners that cover specific devices types (like mobile and CTV), formats (like banner and native) and regions (depending on the buyer’s global scale).
Gallo said Kinesso isn’t “targeting a number” of preferred partners, but that it does prefer partners that are able to serve across device type, format and region.
Although the tests can be strenuous, the rewards can be lucrative. Being a preferred partner means a buyer—in this case, Kiness—will spend a large portion of its programmatic budget through an SSP’s pipes.
“They might not completely shut off the other partners, but they’re going to focus their volume on the selected partners in exchange for the selected partners delivering on the requirements included in that term sheet,” said the first source.
While the pandemic didn’t inspire Kinesso’s audit, it is accelerating the trend. The first source said their company has been getting multiple SPO-related RFIs each week in recent months. The second source said marketers have been acting quicker to implement the results of their audits since the outbreak.
What’s in the RFI?
While every RFI may not be an endless row of spreadsheets, they all generally ask the same questions about business practices. These include assessments of delivery practices, performance, technological capabilities (current and planned), scale, service levels, innovations, differentiated capabilities, solvency and ethics.
“Quality, safety, transparency, capabilities, and innovation were—and will continue to be—critical elements in our reviews,” Gallo added.