Insights

Simple is the New Black: How Programmatic Is Poised To Begin Doing More With Less

Justin Beere VP – DSP Partnerships

Supply path optimization (aka “SPO”) is a three-letter acronym (aka “TLA”) that’s been with us for a couple of years now, and like many TLAs in the programmatic space, it was born in the display world.

As buyers continue to work toward an answer to the display riddle that resulted from the introduction of header bidding, they’re also digging into the programmatic video supply chain. I know because we get a lot of inbound requests for meetings about SPO from DSPs, agencies, and even brands themselves. And for good reason — just because header-bidding isn’t prominent in video doesn’t mean the supply chain is straightforward.

If there’s one thing the ad tech community can agree on, it’s that today’s programmatic systems remain, shall we say, imperfect. So how do we improve? How do we get these types of systems to work better?

The complexity of online ad buying continues to torture everyone—except criminals.
Nat Ives, Wall Street Journal

One possible answer is: maybe we don’t. In 1977 pediatrician John Gall published Systemantics: How Systems Work and Especially How They Fail. In it, he lays out what would become known as Gall’s Law:

That’s good news: programmatic video is a complex system that (mostly) works, having (mostly) evolved from a simple system: good old-fashioned direct-sold campaigns, pictured here:

Figure 1

What started as the sell-side ad server and buy-side ad server having a direct conversation evolved into SSPs and DSPs conversing on behalf of those parties – a delicate, imperfect game of telephone:

Figure 2

So what used to be two interconnected systems are now four—a great example of what systems engineers call an “Interdependent System.” Because these parties are all so reliant on one another for the overall system to function, any failure along the supply chain can result in no impression being served – i.e. no “throughput,” in systems parlance.

Which leads us to the bad news: today’s system has evolved to be significantly more complicated than that. It really looks more like this:

Figure 3

We’ve continued to add more steps in the game of telephone, more dependencies. Getting this stuff to work well can leave the best of us pondering our career choices. But take heart, dear reader, because there are signs of a promising trend in programmatic video: simplicity.

Sign #1: Fewer Auctions, Simpler Decisions

Last year FreeWheel added Unified Decisioning to our sell-side tech stack, enabling publishers to combine traditional SSP tasks and ad server tasks. Remember Figure 2? That’s the old way: the SSP receives bids, holds an auction, notifies the winner, and passes the winning ad to the ad server. Then a second decision takes place at the ad server level to determine whether or not the winning programmatic ad will actually be used. Unified Decisioning combines those two steps into one, simplifying the whole process and allowing all programmatic demand to be included in a single ad decision, which looks like this:

Figure 4

Other sell-side tech stacks are following our lead, solidifying this industry trend toward fewer auctions and holistic ad decisions.

Sign #2: Fewer System Dependencies

One of the best ways to simplify an interdependent system like programmatic is to make it less interdependent in the first place. To do that, dependencies must be removed. What if the separate SSP system wasn’t in the picture? What if that functionality was handled by the ad server itself? Physically unifying – and simplifying – the systems that conduct the programmatic auction and overall ad decision is an extension of “Sign #1” above, and A+E is already using FreeWheel technology to do that with exciting results.

Sign #3: Programmatic Guaranteed

Anyone transacting programmatically is used to worrying about one or more of these questions on a daily basis:

  • As a seller, am I sending enough impression opportunities?
  • As a buyer, am I bidding high enough to win?
  • When I win, am I clearing at the right price?
  • When I clear, am I actually serving through impressions?

Programmatic Guaranteed means not having to worry about any of those things, while still being able to use the same software that’s operating the rest of your campaigns. Impressions are guaranteed. Price is guaranteed. Campaign delivery is simpler and more predictable because there’s no floor price, no bidding, no auction. And with programs like FreeWheel’s DRIVE, you can get all that and still only target the audience you care about.

Simple is the New Black

At FreeWheel we’re big believers in simple. Simple is easy. Simple is fast. Simple is reliable, scalable, and a heck of a lot easier to fix when something breaks. Programmatic video is entering a renaissance of simplification, and it’s going to make us all look (and feel) a lot better.