SPO Can Lead to Unintended Consequences

Recently, an AdExchanger story covered how supply path optimization has many benefits to clients, but can also create unintended effects for advertisers as well as in the marketplace. PMG’s programmatic director Justin Scarborough shared his thoughts about the topic and discussed market fragmentation, Google and its inherent advantages.

The story identified two main pitfalls from SPO strategies that buyers may not be aware of — constrained scale and access to unique ad supply, and unintentionally bolstering Google’s already-dominant position in the programmatic supply chain.

CTV is an example of an area where, if SPO results in the selection of only a couple of partners, then ad units unique to that channel might be unavailable. According to Scarborough, “The CTV space is so fragmented, that buyers are nearly doing SPO simply by just creating a media plan.”

The story also pointed out Google’s advantages because of “its position as an end-to-end ad tech stack,” which means “it can push supply toward its own media within its walled garden.” Scarborough shared that “PMG often sees that the percentage of media bought through AdX, for instance, is higher when using DV 360.”

Google’s advantages also come from the “strength in its first-party data set, which will become even more important to brands as third-party cookies disappear.” Scarborough said, “When cookies are deprecated, Google has a customer match solution, a DSP and those pipes. SPO could be predicated on first-party data at that point.”

Read the full story on SPO here.