In online publishing world, demand path optimization (DPO) is gaining importance as publishers audit their supply chains. While most publishers understand that a messy supply chain means more fees and less money, there are a few misconceptions around DPO (beyond fees) that impact publisher revenue.
It is often thought that opening up your inventory in multiple places will drive up CPMs and increase revenue. This way of thinking evolved when header bidding was introduced. While it’s true that there will be more bidders vying for that inventory, in order to make it available across multiple exchanges you also need to increase the numbers of technology partners involved. Every time an ad has to flow through another piece of technology or intermediary, a fee is taken off the top. These fees can add up quickly, and what was once a $10 CPM can quickly become a $5 CPM, resulting in a diluted publisher payout. Advertisers are also highly focused on maintaining the value of their working media and are conducting their own SPO initiatives. Buyers are focusing their efforts on fewer supply chains that bring the most value and allocating more spend to partners with the highest efficiency.
When trafficking inventory through additional layers of technology, your inventory is subjected to additional parameters set by these intermediaries. Each layer of tech has its own filtering rules which can lead to inventory being blocked and ineligible for deals. Each SSP also has certain QPS/throttling rules set in place for partners, where they restrict the number of bid requests providers are allowed to run through their pipes. This is typically due to infrastructure costs that SSPs and downstream DSPs are incurring but because of these throttling measures publishers are missing out on premium demand that could be bidding on their inventory.
Although many tout similar messages, not all demand partners are equal. It’s important to look under the hood and evaluate their supply chain effectiveness. Vendors lacking direct integrations are forced to partner with intermediaries that add extra tech layers and fees which deplete CPMs. These extra tech layers also make your inventory less appealing to buyers because their working media dollars quickly lose value. Marketers highly value supply chain transparency and will spend more on paths with the most directness.
Another consideration to make is what demand sources vendors are bringing to the table or plugged into. Do they have sales teams working with agencies and holding companies to bring in deals? Or are they plugged into other exchanges?
Check out our blog on The Top Five Questions Publishers Should Ask Their Demand Partners to unlock specific questions that will help determine which vendors provide the most value.