Programmatic · also called SPO
Supply path optimization (SPO)
Supply path optimization (SPO) is a buyer's practice of choosing the most direct, cheapest and most trustworthy routes to the same inventory, and cutting unnecessary resellers and duplicate paths.
The same impression can often be bought through several SSPs and resellers at once. SPO means the buyer (or its DSP) picks the best path and stops bidding through the others. "Best" usually means fewer hops, lower fees, higher win rate, better data and fewer quality problems.
Buyers rely on supply-chain transparency tools to do this. ads.txt shows which sellers a publisher authorises and whether they are direct or resellers; sellers.json identifies who each seller account belongs to; the supplyChain object lists every party that handled the bid request. Buyers also compare take rates and IVT rates by path.
SPO took off after header bidding caused massive bid duplication, when DSPs were receiving the same impression dozens of times. Big agencies and DSPs now sign direct deals with preferred SSPs. The sell-side mirror image is demand path optimization.
Think of it like this
SPO is like buying directly from the farm shop instead of through three middlemen who each add a markup to the same carrots.
An example
A DSP sees one Japanese news site's impressions via 9 paths. SPO keeps 2 direct SSP paths, cuts 7 reseller paths, and the advertiser's average fee per impression falls by several percentage points.
Related terms
ads.txt
ads.txt (Authorized Digital Sellers) is a public text file on a website's domain listing which ad sellers and accounts are authorised to sell that website's ad inventory.
sellers.json
sellers.json is a public file in which SSPs and exchanges list their seller accounts, naming who owns each one and whether it is a publisher or an intermediary.
SupplyChain object (schain)
The SupplyChain object (schain) is a field in OpenRTB bid requests that lists, in order, every seller or intermediary that handled the impression on its way from the publisher to the buyer.
Bid duplication
Bid duplication happens when the same ad impression reaches a buyer through several SSPs or resellers at once, so the buyer may bid against itself and waste processing and budget.
Demand path optimization
Demand path optimization (DPO) is a publisher's or SSP's practice of prioritising the buyers and routes that deliver the most value, and cutting those that add cost without adding demand.