What is Video Supply Path Optimization (VSPO)?

Dvir Doron

How can video buyers secure the shortest path to impression?

Header bidding delivered the great promise of providing sellers with better coverage of the demand sphere and providing buyers with better visibility into the supply sphere. But not without side effects.

The ultimate ad-tech hack used by 72% of publishers trading programmatically (Source: Serverbid), header bidding does wonders to democratize the bidding process and introduce better inventory to programmatic transactions, but often this results in the same impression being auctioned by multiple sell side platforms simultaneously, creating an avalanche of bid requests and a burden on DSPs.

Buyers concerned about bid duplications and the resulting dead weight on their servers will need to be more discerning about the exchange they’re after. And as usual, in video, tricky standards, latency issues, and a fragmented landscape give rise to more hurdles.

Fortunately, new video supply path optimization technology is forging a direct, more efficient pipeline between SSPs and DSPs. This “hack-on-hack” was designed to alleviate DSP server stress, minimize QPS (Queries Per Second), bring down costs and increase transparency. Let’s explore how this new technology is panning out across the spectrum and who’s to benefit from it.

So what is Supply Path Optimization (SPO)?

SPO technology uses advanced algorithms to select bids with the highest chances of winning an auction. It creates a direct pipeline that streamlines how DSPs interact with SSPs and helps rule-out impressions with poor chances of winning an auction. Designed at first as a buy-side tool, SPO today enables DSPs and SSPs to transact more efficiently and at lower costs.

How does SPO work for DSPs?

SPO is a product of the header bidding pandemonium that is creating cluttered wrappers, header tags and SSPs all running through the same publisher inventory at a similar priority and price. Although header bidding helps DSPs gain access to more ad inventory and a wider selection, in some cases, it over-delivers and forces many to process far more impressions per second. It also raises confusion about the right choice of SSP, as the same impression can simultaneously appear for sale by multiple sources.

Processing more impressions spikes QPS rates, burdens DSP servers and adds infrastructure expenses. So DSPs, especially mid-sized ones, need to be smart about the way they reduce ad impressions, how they filter out low value impressions and how they handle QPS.

For DSPs SPO’s filtering process significantly reduces duplicate inventory, QPS and increases bidding and winning chances, at a more reasonable price.

How can the sell side benefit from SPO?

Publishers are well aware that video header bidding, particularly the hybrid approach operating on both server and client sides, introduces more competition and transparency and significantly reduces latency. It enables publishers to realize the true price of their video inventory and increase their yield and fill rate, while culling VPAID errors. But despite such innovations, many publishers continue to optimize using server OR client-side video header bidding and continue to transact in parallel via the waterfall to secure themselves against VAST opt-outs. For DSPs and SSPs this spells out disaster; it reintroduces latency and reduces yield. A double transaction setting interrupts the seamless bid journey and wreaks price-hiking havoc.

Just as DSPs gain a more efficient pathway, publishers have a lot to gain from signaling a preferred path that reduces QPS and the middlemen. After all, quality traffic transactions completed efficiently increase the value of impressions and probability of fill rates and wins. Publishers weighing in on supply path optimization also stand to benefit from cleaner pipes. A less polluted route can reduce artificial flooding and filter out middlemen that do not serve their interests. A direct path also contributes to DSPs increased trust in the sell side and their willingness to spend.

How does supply path optimization work in video?

Video SPO (VSPO) technology works inside the player, as opposed to display. Being inside the player, VSPO runs each video impression internally, making it possible for the optimization process to analyze each and every impression route and create a transaction process in one hop.

Optimization algorithms analyze and select video bids with the highest chance of winning an auction. Using predictive modelling and advanced yield optimization that are built into the player, it can overcome re-auctioning and prevent video bidding duplications that provoke QPS and flare up DSP frustration. In a unified yield optimization process, VSPO can map out the ideal route between the buy and sell side across the entire transaction landscape including direct, programmatic and marketplace environments.

In the end VSPO clears the way for a transaction scape devoid of waterfalls, re-auctioning and middle men. Maybe it’s time to lay down the pipes for sterilized quality video transactions that secure more transparency, less time outs and DSP costs.

If you are interested in Video Supply Path Optimization, our technology team is available for free consultations on planning and building the right solution.