What is supply path optimization (SPO)?
Supply path optimization (SPO) is the process of evaluating and consolidating the routes an ad takes through the programmatic advertising ecosystem. By reducing unnecessary intermediaries and prioritizing more direct supply paths, SPO can help advertisers improve transparency, control costs, and make their ad spend more efficient.
How SPO works in programmatic marketing
Over the past decade, advertisers have increasingly adopted programmatic marketing, which uses data insights and automation to price and place ads while keeping the process transparent and efficient.
Getting an ad from advertiser to publisher can mean passing through several intermediaries along the way: demand-side platforms (DSPs), ad exchanges, resellers, and supply-side platforms (SSPs). SPO cuts down that path, stripping out unneeded hops that add cost and reduce transparency, so advertisers end up closer to the actual in-app ad supply.
Best practices for supply path optimization
The goal of SPO is to provide greater transparency into the programmatic supply chain while reducing unnecessary intermediary costs. Advertisers can do this by:
- Use supply chain transparency tools: Get transparency into the supply path with tools like app-ads.txt, sellers.json, and the Supply Chain Object.
- Evaluate scale and source of inventory: Make sure you have access to quality developers and ad formats to maximize ROI.
- Prioritize direct supply paths: Consolidate spending toward trusted SSPs, exchanges, and other supply partners that provide direct access to publisher inventory, reducing unnecessary intermediaries and improving transparency.
Learn how Unity Programmatic Solutions supports these direct, transparent supply paths, including Unity's own Exchange offering.
What are the benefits of using supply path optimization?
SPO improves your brand's buying power:
- Reduce costs: Get transparency into fees and reduce costs from reseller intermediaries, extending the impact of your ad dollars.
- Drive performance: Ensure your dollars are flowing to premium, quality ad space authorized by the publisher for sale.
- Maintain quality partnerships: Manage your publisher-partner relationships more effectively and buy from trusted direct sources.
- Get full transparency: Gain visibility into which supply sources the publisher has authorized to sell their ad traffic.
What are the challenges of using supply path optimization?
SPO comes with real trade-offs to weigh:
- Narrower reach: Cutting down to fewer supply partners means cleaner paths, but also less reach and scale, a real trade-off, not a free win.
- Ongoing effort: Evaluating and consolidating supply paths takes real, continuous account-management work, not a one-time setup.
- Partner-dependent transparency: The visibility SPO promises is only as good as what partners choose to disclose, without published tools like app-ads.txt and sellers.json on their end, there's nothing for SPO to work with.
Frequently asked questions (FAQ)
How is SPO different from ad mediation?
Ad mediation manages bidding across ad networks within a single app. SPO operates one level up, looking at how many intermediaries sit between a specific DSP and a specific publisher's inventory, regardless of which mediation platform is in use.
Does SPO make my campaigns more expensive?
No, the opposite is the goal. Removing unnecessary intermediaries typically lowers total cost per impression, since fewer resellers means fewer fees taken out of the same ad dollar.
Does SPO only benefit advertisers, or can publishers benefit too?
SPO can benefit both advertisers and publishers. Advertisers can gain greater transparency and efficiency, while publishers can benefit from more direct buying relationships and reduced duplication of bids across supply paths.