How buyers can implement supply path optimization for in-app media buying

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In any example of programmatic ad buying, there will almost always be a layer between the direct advertiser and the publisher. After all, this is how advertisers achieve scale.

Nevertheless, with so many ways to access publishers’ inventory, it behooves ad buyers to know that they are accessing them through the most efficient supply paths. For this, ad buyers need to identify which entities are involved in or enabling their ad buys, and whether they are adding any value to the supply path. This is why many leading brands and agencies have undergone some kind of supply path optimization (SPO) effort — to gain greater clarity and weed out supply paths that are not efficient for them.

It is one thing to understand why SPO can be helpful, but it is another thing entirely to undergo an extensive and comprehensive SPO plan. This is especially the case in the in-app world, which is newer and sometimes more convoluted than the browser-based world that most U.S.-based digital advertisers are used to.

In a new InMobi guide, ‘Supply Path Optimization for In-App Advertising: An Advertiser’s Guide to SPO,’ there are some steering principles by which buyers can implement the strategy. The following sections highlight four of these, and each is essential to effective plans.

Prioritize direct path to supply

The fundamental core of SPO is the aim to have as few hops as possible between the advertiser and the final advertising destination, specifically where the ad is actually displayed. Whenever possible, advertisers should seek the most direct paths to supply possible. 

In the mobile app space, the best way to determine which supply-side platforms (SSPs) are offering direct supply is through leveraging the IAB Tech Lab initiatives app-ads.txt, sellers.json and the OpenRTB SupplyChain Object (schain object). When it comes to each initiative, there are some essential things to know. 

  • App-ads.txt is the version of ads.txt specifically for mobile apps. App-ads.txt is a repository of authorized sellers that a publisher hosts in their developer website which spells out which SSPs, exchanges and ad networks have a direct advertising relationship and which ones, if any, are authorized resellers.
  • Sellers.json is a file that enables buyers to look up the relationship between the publisher or seller through which the SSP is sourcing the inventory. Buyers are able to do so by using the publisher ID in the bid request and looking it up in the sellers.json file hosted on the SSP domain.
  • SupplyChain Object is composed primarily of a set of nodes where each node represents a specific entity that participates in the selling of a bid request. Consequently, a complete chain represents all sellers that were paid for with an individual bid request.

Look for efficient paths

According to an old proverb, “There are many paths to the top of the mountain, but the view is always the same.” However, with in-app programmatic advertising, the opposite is true. 

For advertisers, there are often multiple avenues to reach users on specific apps. But some paths are likely to be more valuable than others. That means advertisers should work with their agency and demand-side platform (DSP) partners to look at which paths are providing the best return on investment.

For example, say an advertiser can reach a suite of apps directly through two SSPs. While the path may be just as direct with the first SSP as it is with the second SSP, the second platform may provide better creative performance, a better audience targeting product and greater transparency. In this instance, it is easy to see how the second SSP is the preferable option even though the number of hops is the same between both.

Header bidding access is preferred

While header bidding and more unified ad auctions have been the norm in browser-based advertising for many years, it has only recently become more commonplace in the programmatic in-app space. Whenever possible, advertisers should seek out supply that is accessible via header bidding. Compared to waterfall-based supply, header bidding helps buyers reduce costs by allowing them to reach the maximum possible audience with the minimum infrastructure overhead. Header bidding also creates more transparent auctions for the buyers as their bids are unaffected by competing bids in intermediate auctions common in waterfall setups.

Consider optimized reseller paths

In SPO discussions, reselling can easily be seen as a negative, especially considering that often the overarching goal of SPO is to simplify programmatic supply paths. But in the in-app world, especially, there are instances where resellers provide value.

For instance, in the mobile gaming space there are some platforms that allow ads to appear natively within a game. In these cases, advertisers can programmatically place ads on billboards in a virtual cityscape or in a stadium setting in a sports game.  

While there are specialist technology companies that make these kinds of ads possible, they have to work with mobile SSPs to make this available to programmatic buyers at scale. In this case, even though they are technically classified as resellers, intermediaries unlock ad buying opportunities for buyers that would otherwise not be possible. 

Examples like this in the in-app space demonstrate why advertisers need a holistic and nuanced understanding of reselling.

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