Q&A: How Jounce Media and Teads are framing SPO’s role in driving sustainability

In a custom analysis for Teads, Jounce Media showed that among the 10 largest omnichannel SSP exchanges, Teads ranked in the top spot for supply path optimization (SPO) among web video supply chains — offering 80% directness to DSPs and 100% transparency of its bidstream.

In this Q&A, adapted from an extended conversation via the Custom in-house agency at Digiday, Chris Kane, founder and president of Jounce Media and Teads co-CEO Jeremy Arditi, discuss Jounce’s findings and how SPO can be utilized to drive business and sustainability outcomes.

Can you tell us a little about the methodology behind this custom research?

Chris Kane: At Jounce, we put math around the movement of money from DSPs to publishers. As part of that, we operate data systems that integrate data from public sources like ads.txt and sellers.json with data from private sources like DSP delivery reports. This allows us to quantify how much money flows through the supply chains that connect DSPs and publishers across a million websites, half a million mobile apps and 50,000 CTV apps.

Some supply chains are direct, while others are less so, and we can identify which is which. What we’ve done for this particular research is isolate web video inventory and benchmark how much of the bidstream — powered by Teads and other companies selling web inventory — meets our proprietary standards for directness.

What are the core benefits of SPO for publishers?

Jeremy Arditi: One of the main and obvious benefits of SPO for publishers is financial efficiency. For publishers, this should mean higher yields, whether that’s through improved CPM or higher volumes. We are also seeing certain holding companies and agencies looking to concentrate more of their client dollars into more direct supply paths, which should translate to better unit economics and larger volume for publishers in the medium term. But there are other lesser-known benefits as well.

The control over the publisher’s general B2B positioning in the marketplace is one such benefit. If they are working with 150 different platforms that are all allowed to access their inventory, that means that the sales narrative of that publisher is being told in 150 ways. For long-standing, established publishers, a more direct supply chain can give them increased control over how their story is told.

Chris Kane: For example, over the summer, there were concerns that some publishers were unable to distinguish between in-stream video and out-stream video in their own inventories. Well, if a publisher operates its auctions through a direct supply chain, it’s pretty easy to tell the difference.

But it’s borderline impossible for publishers who sell most of their video inventory through multihop supply chains that are outsourced to an intermediary. We had premier publishers coming to us asking if there was any mechanism that would give them insight into whether or not they were giving buyers an incorrect impression of what they were selling to them. And the answer is no; it’s next to impossible to know how your inventory is being presented to buyers if you sell through multi-hop supply chains.

SPO as a concept has been around for some time now. How has it evolved in the past five years? What lessons has Teads learned in that time?

Jeremy Arditi: Over the last five years, we’ve seen a clear acceleration of the attention and care coming from the buy side. It seems that large agencies and advertisers are becoming increasingly aware of the complexities of the supply chain compared to just a few years ago.

This is a much more important topic now. Five years ago, everyone was concerned with connecting the pipes – what are the metrics and currencies that we measure? How do we detect and eliminate fraud? That kind of thing. That layer has, by and large, been built.

CTV is still young, but on the web the basic plumbing has been constructed and is well understood at this point. The core of SPO is, “How do we make the plumbing more efficient?” Large advertisers and agencies want to reduce the overall number of supply partners they are working with, so we’ll continue to see that trend of consolidation from the supply side.

Chris Kane: Adding to Jeremy’s point, publishers are behaving very rationally here. On the surface, opaque supply chains look wasteful and unnecessary, but they are a rational way for publishers to maximize their share of DSP demand. So if we’re going to rationalize supply chains, that change has to come from the buy side, which is already happening more and more.

For a decade, there has been an open auction and private marketplaces. And while private marketplaces are going to continue to exist, the open auction is already changing. The sophisticated buyers will continue to have one-to-one agreements with a handful of premier publishers, but instead of dumping the rest of their spend into the open auction, they will look to increasingly specific supply chains.

The current iteration of the open auction has become too diverse, ranging from the very best to the very worst of the open internet. To combat this, buyers are making decisions about which supply chains are on by default when they run a campaign across many different websites and ads. The open auction is being segmented and eventually won’t exist as a singular thing that is seen by all buyers. There will be an open auction as Agency A buys it versus how Agency B buys it.

Sponsored by: Teads

https://digiday.com/?p=486948