Demand Path Optimisation (DPO) and Supply Path Optimisation (SPO) are two strategies in digital advertising, specifically in the programmatic ecosystem, aimed at improving the efficiency and transparency of the ad supply chain. Both focus on optimising different parts of the ad transaction process, but from different perspectives.
The recent focus across the industry has been on SPO, which primarily benefits advertisers and Demand-Side Platforms (DSPs) rather than publishers. This at-a-glance guide clarifies the differences, and highlights why DPO is crucial for publishers.
DPO vs SPO at a glance
| DPO (demand path optimisation) | SPO (supply path optimisation) | |
|---|---|---|
| Who does it | Publishers and their ad tech partners | Advertisers, agencies and DSPs |
| What it optimises | The routes a publisher uses to sell each impression | The routes a buyer uses to reach that impression |
| What gets cut | Bid requests to partners that rarely bid or win | Duplicate and costly resellers between buyer and publisher |
| Main benefit | More revenue per impression, lower latency, fewer wasted requests | More of the media budget reaches the publisher |
| Data used | Bid rates, win rates, CPMs and revenue by partner | sellers.json, ads.txt and fee data by supply path |
Demand Path Optimisation (DPO)
Perspective: Publishers
Objective: DPO is focused on optimising the paths through which publishers sell their ad inventory. It involves selecting the most efficient and profitable routes to connect with demand sources (like Supply-Side Platforms and advertisers). The goal is to maximise revenue and reduce the amount of partners that will either not bid on or not win a certain impression, while ensuring that the inventory is sold through trustworthy and transparent channels.
Key Activities:
- Evaluating Demand Partners: Publishers assess the performance, transparency, and revenue potential of various demand sources.
- Reducing Intermediaries: By minimising the number of intermediaries that do not add value between the publisher and the advertiser, publishers can capture a larger share of ad revenue.
- Improving Transparency: Ensuring that the demand paths are clear, with visibility into who is buying the inventory and at what cost.
Benefits:
- Revenue Optimisation: Maximise value from each ad impression.
- Control & Transparency: Gain better control over who buys inventory, improving transparency and reducing fraud risk.
- Buyer Evaluation: Identify top buyers through bid analysis, financial reliability, and response time.
- Ad Quality & Risk: Assess ad quality and perform risk assessments to protect user experience.
- Strategic Decisions: Make informed choices about site impact (e.g. latency, and UX), and consider the sustainability and ethical impact of buyers.
- Stronger Demand Side Partnerships - By reducing bid wastage and only delivering requests to demand partners who are more likely to bid and win, a publisher becomes a more profitable and there stronger partner to SSPs and DSPs.
- Improved Sustainability - Remove unnecessary hops that cause wastage and make your inventory directly available to the end buyer.
Supply Path Optimisation (SPO)
Perspective: Advertisers and Demand-Side Platforms (DSPs)
Objective: SPO focuses on optimising the paths through which advertisers (or DSPs) access inventory from publishers. It involves evaluating and choosing the most efficient, transparent, and cost-effective routes to reach quality ad inventory. SPO aims to reduce waste, avoid unnecessary intermediaries, and ensure that ad spend is used effectively.
Key Activities:
- Evaluating Supply Partners: Advertisers or DSPs assess the performance, transparency, and cost-effectiveness of various supply sources and exchanges.
- Reducing Path Redundancies: By eliminating unnecessary or redundant paths, advertisers can avoid additional fees and complexities in the supply chain.
- Improving Transparency: Ensuring that the chosen supply paths provide clear visibility into the fees and quality of inventory.
Benefits:
- Better use of ad spend, reducing unnecessary costs.
- Increased transparency and accountability in the ad supply chain.
- Higher likelihood of reaching target audiences efficiently.
Summary
- SPO is focused on optimising how advertisers find and purchase ad inventory, ensuring that their ad spend is used effectively and transparently.
- DPO is focused on optimising how publishers sell their inventory, maximising their revenue and ensuring that they work with trusted demand partners.
In essence, both DPO and SPO aim to streamline the programmatic advertising process but from opposite sides of the transaction—advertisers optimising their purchase paths and publishers optimising their sales paths.
Implementing DPO can be complex due to the numerous variables, data points, and resources involved. However, Content Ignite’s Fusion platform is specifically designed to help publishers navigate these challenges and execute DPO efficiently.
Fusion helps publishers do this with SSP Insights, which shows each partner's bid funnel from requests to wins, bid throttling in header bidding, and Experiments, which test adding or removing a partner on a share of live traffic before you commit.
