An emerging trend that’s critical in this next phase of optimizing the advertising supply chain is “Demand path optimization”.  Publishers are not getting the value of their audiences in the open exchange environment due to the supply chain clutter having too many hops between demand and supply side. Publisher private Marketplaces PMP’s have been developed in an attempt to address the “ad tax” fragmentation and “right price” the value of their inventory and audiences. While we believe this is an important step in the right direction, and have built out a PMP channel on the Kubient [Audience Platform]. We believe it’s critical PMP’s not become another silo in the supply chain vs becoming an integrated channel in the open digital advertising ecosystem. The answer lies in optimizing the entire supply and demand, not just one side or the other. Enabling the ability to connect publishers audiences directly to campaigns, and optimize their yield in the open marketplace.

We have found there are many hi-value audience publishers that benefit from our PMP channel. Who’ve been hurt by the “volume” vs “quality” issue we are facing as an industry. Their audiences are basically invisible due to not having the 200m uniques + a month scale to be seen by the agencies and DSP demand-side platforms. Based on our findings, we are enabling advertisers to have direct access to these unique audiences via our Direct Marketplace channel. As well as enabling publishers to enter the programmatic RTB ecosystem so they are realizing the right ROI for their audiences. With an emphasis on the “audience” aspect, because both sides of the marketplace need to start thinking about selling and buying audiences vs sites and placements.

The following article gives the right insights into this new aspect of today’s digital audience advertising trend that directly connects both buy and sell-side.

by Tim Peterson | THE PROGRAMMATIC PUBLISHER Digiday  

Programmatic advertisers have grown more comfortable buying publishers’ inventory on the open marketplace. That brings up questions about what role, if any, publishers’ private marketplaces, which enable publishers to maintain direct relationships with advertisers buying their inventory programmatically, now play.

Publishers such as Leaf Group, AccuWeather, BuzzFeed and Dotdash have seized on ad buyers’ efforts to make their programmatic buys more efficient through supply-path optimization, a catch-all term for techniques to identify the most effective and cost-efficient means of programmatically buying publishers’ inventory. The popularity of supply path optimization among programmatic advertisers has given rise to a complementary undertaking among programmatic publishers that Scott Messer, svp of media at Leaf Group, has dubbed “demand-path optimization.”

“Demand-path optimization is the reverse of supply-path optimization. I’m looking at what’s the most efficient path to get marketers’ dollars to me,” said Messer.

Demand-path optimization is an important undertaking among publishers in order to reinforce their role in the programmatic supply chain as more than inventory providers. Historically PMPs have been able to reinforce publishers’ role by offering safe havens for advertisers interested in buying ads programmatically but concerned about brand safety and fraud issues with inventory available through open auctions. However, ad verification vendors and initiatives like ads.txt have helped to assuage those concerns, and the rise of header bidding combined with advertisers’ and agencies’ embrace of supply path optimization has given ad buyers confidence that they are able to sufficiently access high quality, high performing inventory in the open marketplace.

“The open exchange, if bought in a responsible way, is the best way to scale against the audiences we care about,” said one agency exec.

“PMPs have always been a part of what we do, but the majority of our buying is more focused on the open exchange. It’s a symptom of having clients running campaigns that are more performance-based,” said a second agency exec.

While publishers are not against advertisers buying their inventory on the open exchange — money is money — they are working to position their PMPs as being able to offer better performance for advertisers. For example, AccuWeather has some PMP deals with advertisers that cover the same inventory that the publisher makes available on the open exchange. But when that inventory is purchased through its PMP, AccuWeather can apply its first-party data so that the ads only run when certain conditions are met that would maximize an ad’s performance, such as controlling for higher viewability. “The more powerful we can get with our first-party [data] is where we can defeat that [sentiment among ad buyers of] ‘Oh, I can just get this in open for cheaper,’” said Sarah Krembs, national director of strategic sales at AccuWeather.

In addition to using their PMPs to enhance the inventory that advertisers can access, publishers are increasingly using their PMPs to enhance how advertisers access their inventory. For Dotdash, the role of the PMP “has definitely evolved because, with supply-path optimization, we’re able to say these are the primary SSPs we use and this is the best way you can access our inventory. It brings back the conversation of this is why the PMP is valuable because you’re getting a direct connection into what we do and how we do it,” said Sara Badler, svp of programmatic revenue and strategy at Dotdash >>> READ MORE