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It’s All About the Money: SPO, Transparency & Everything In Between

It’s All About the Money: SPO, Transparency & Everything In Between

5 Minute read

Once upon a time, the online advertising supply chain was straightforward; a buyer engaged directly with a publisher to purchase inventory. In the last quarter-century, the industry has evolved into a complex and intricate system, to incorporate a plethora of technology providers and intermediaries.

Header Bidding introduced in 2016 opened up the "SSP market” to publishers, allowing them to cast a wider net and improve overall yield, but further complicated the process and pushed the publisher/buyer relationship further apart. Suddenly, there were multiple ad calls for every impression, and supply paths were growing exponentially.

A lack of transparency opened up the marketplace to misrepresentation, fraudulent activity, and unjustified overhead costs, causing the industry to spiral out of control.

Supply Chain

Refusing to accept the chaos, buyers realized they must protect themselves from the waste they saw in their digital budgets. Supply Path Optimization (SPO) was created to reduce the number of intermediaries until each adds value, with buyers focusing on the most effective routes to reach their desired audience, while cutting out the "bad" ones.

Publishers can significantly influence the way the buy-side views them. But they need to understand how the buy-side uses SPO and what they can do to adapt and maximize their potential with buyers, and not get left out. Here are four "SPO Golden Rules" for publishers.

SPO Golden Rules For Publishers

Take Back Control

It’s time to regain control over who is selling your inventory and for how much. Go through the list of sellers in your domain using sellers.guide analysis - do you know everyone? Do you trust them? Do you control the prices they are selling your inventory for?

Resellers are not adding value if they are selling your traffic for peanuts. Meanwhile, hidden sellers devalue the inventory. This results in a lack of control over floor prices, multiple reselling, and buyers accessing your inventory for cheap.

Take matters into your own hands by assigning someone in your organization to manage your ads.txt file. This task often gets overlooked. So, just like you’d have someone in charge of GDPR, you need someone to look after your ads.txt file.

Relationships Matter

"We want everyone in the supply chain to earn their keep, and what that means is you add more value than you extract in fees "- Jeff Green, CEO, The Trade Desk.

Buyers are looking for the most efficient and cheapest path to the inventory, giving vendors the incentive to send you Direct lines. A Sellers.guide survey found that an average publisher works with 50 sellers, 18 of whom claimed to be DIRECT - hence, the owner of the domain - which doesn’t make sense.

The relationships listed in your ads.txt are very important, misrepresentation can cost you money. The good news is you have complete control over the lines recorded in your file. Only your seller id can be DIRECT. Direct relationships should send you checks, large ones, and a Reseller relationship should be traceable to a line item of money flowing through an existing Direct relationship.

Remove Outdated Lines

The ad tech industry is highly dynamic and subject to regular changes, for example, the new privacy regulations and updates in SSP policies. As change is an integral part of the industry, it’s another reason why ads.txt files need to be maintained regularly.

Many publishers forget to remove ads.txt lines from companies they no longer do business with, and these are referred to as dormant ads.txt lines. This means former partners can still access the inventory, and as the ads.txt file grows, there is a risk they may resell it without permission.

The Sellers.guide survey also found that 73 out of 277 ads.txt lines (the average number of lines per domain) contain non-existing seats, which means the "Seller id" does not exist in the SSP/Exchanges' sellers.json files, and over 25% of lines are unnecessary.

Make sure to:

- Remove all ads.txt lines representing seats that are no longer listed in the exchanges' sellers.json

- Remove lines of partners you no longer work with

Ads.txt is here to protect you

In 2020, advertising fraud caused worldwide economic losses of 35 billion U.S. dollars, representing more than 10 percent of the global digital advertising market.

While transparency initiatives like the IAB’s ads.txt, sellers.json, and recently, buyers.json are coming to life, many in the industry still view them as too complicated, and a lack of management over the files means fraud still happens. In fact, research by the ISBA and PWC revealed advertisers are missing 15% of their budgets, and publishers should make 29% more revenue.

When used correctly, ads.txt can reduce fraud, build trust with buyers and improve the monetization potential of your inventory, but this relies on the industry to adopt and manage the files correctly. Make sure you are using it properly, validate lines sent to you before adding them. Remove rows of partners you have stopped working with, make sure there are no duplicated lines from vendors, and continue to monitor, check the file regularly, just as you manage the rest of your media. After all, it is an integral part of it.

Key Takeaways

In a statement to AdExchanger, TTD stated, "Our goal...is to see every ad opportunity once per exchange. This will help create a fair and transparent marketplace for advertisers and publishers, which is a key to the trust and integrity necessary to ensure a growing, thriving market.”

Publishers shouldn't sit around while buyers are actively looking for the best supply paths. They need to step up and take control over how their inventory is presented, so buyers choose the best path that leads to them. Brands, agencies, and DSPs have stated that their three main objectives for adopting SPO are brand safety, reduced fraud, and improved KPIs. So, to match these goals, publishers must improve their domain security, avoid fraudulent activity and, of course, improve their monetization.

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