Why Nearly Two-Thirds of Video Advertisers Are Prioritizing Supply Path Optimization

By: Eric Davis, Sr. Director, Independent & Political Demand

Image of purple lights on a road at night, supporting FreeWheel Insights: Why Nearly Two-Thirds of Video Advertisers are Prioritizing Supply Path Optimization

As more and more video advertising shifts to automated or programmatic execution, ad buying becomes more complex. Marketers are increasingly focused on simplifying the process. One way to accomplish that is supply path optimization (SPO) or streamlining the path from ad buyer to seller.

FreeWheel conducted a survey via Advertiser Perceptions to better understand how the agency community views SPO in the video context. The survey uncovered that nearly two-thirds of advertisers (65%) cited SPO as a priority when asked to rate its importance in the TV ad buying process.

How advertisers are defining SPO for video

While the industry may look at SPO through different lenses, one definition stood out. A majority of advertisers (57%) define SPO as “getting as close to the inventory source or eliminating tech hops.”

Others define SPO as:

  • 19%: Clearing at the lowest price
  • 14%: Minimizing tech fees
  • 9%: Having the lowest floor price

Common to all these definitions is limiting the cost of media by streamlining the supply chain. This goes along with a broader industry emphasis on transparency and efficiency as Google sunsets the third-party cookie on Chrome. Marketers want to do business as directly as possible with publishers, which generates savings while eliminating exposure of audience data to third parties.

Why SPO matters for the broader industry

SPO is not just about cost savings and transparency for ad buyers; it benefits the entire advertising ecosystem. It encourages the industry to move towards a more efficient route that secures high-quality ad inventory, reduces costs, eliminates intermediaries, and eradicates hidden fees while boosting the fidelity of audience data in the bid stream.

SPO also enhances the viewer experience by delivering more relevant and engaging content. For example, when publishers have more insight into advertiser demand, they can better manage ad frequency.

Does your tech partner provide the best SPO?

As more investment shifts to programmatic, it is essential for buyers to understand the entirety of their supply chain. Each hop should provide value. Getting as close as possible to the source of premium video supply should be important for advertisers, and trustworthy partners should help brands and agencies meet that goal.