Why the Digital Advertising Industry Needs to Focus on Value Chain Optimization


ISBA Study on Programmatic Supply Chain Transparency has given the digital advertising industry an impetus to unite and implement practices to improve transparency across supply and demand chains. By design, the study did not define or standardize programmatic buying standards, measurement and value – rather, it provided a much-needed platform on which the industry can build.

As a result of the report, Supply Path Optimization (SPO) and Demand Path Optimization (DPO) are now ubiquitous, which is a step in the right direction, but we can do more to improve understanding not just media pricing. , but the value.

It’s time for all stakeholders to come together and create a responsible media value chain that incorporates content quality, transparency and data accountability from the start – a supply chain that’s good for consumers and good for deals. We are on the eve of the next technological revolution that begins and ends with transparency and value.

Defining and measuring transparency and value

Oscar Wilde defined a cynic as someone who “knows the price of everything and the value of nothing” – a definition that is particularly fitting in the context of the digital advertising industry today. The hurdle we face is creating true transparency, because without transparency you can’t define value or build trust.

The challenge we face is that transparency means different things to different people and changes over time. Industry standards such as IAB UK’s Gold Standard and open source initiatives such as Prebid.js are just two initiatives designed to create an open, collaborative and inspectable marketplace with transparency built in from the start.

Right now, we need to focus on developing a consistent way to measure and report on how media investments are distributed across the supply chain. This requires adoption and effort from both the buy side and the sell side. Yes, it will take investment, resources and time – but we cannot lose sight of the end goal of restoring trust, which will benefit everyone.

With the insights we have today, we need to collectively evolve SPO and DPO to look at the value each transaction brings to all parties in the chain. This will build confidence in programmatic as a buying mechanism, in its providers and its emerging channels – especially integrated and connected television (CTV).

The challenge of measuring value is that not everyone defines value the same way and it’s nearly impossible to find a definition that works for everyone, from publishers and ad tech companies to agencies and ad tech companies. brands. It is about creating a framework in which SPO and DPO can be used as business intelligence tools that can be transposed to any value calculation. This means that publishers can use data from SPO and DPO to, for example, measure performance or subscriber growth; brands can measure sales or customer loyalty; and agencies can measure the effectiveness of advertising.

Achievable next steps

Measuring and aligning value across the entire programmatic chain is, at this time, impossible, but we can do more.

Above all, there must be collaboration between all parties involved in the programming and an agreed goal. Next, we need to make sure the solutions we develop work for everyone, not just those with the most voice, the most money, or the most resources.

New channels that are built should be addressable and they should provide commonality to all channels – and as much as possible respond to potential new channels. There must also be real accountability for delivering and proving value – and a standardized taxonomy and process for unifying data. As we develop new ways to put data together, we also need to focus on developing tools that allow us to understand the data and provide automated insights and optimization capabilities.

From there, we can scale further and look at the value of every audience segment, not just every link in the chain. This will open up more opportunities for publishers and media buyers to optimize campaigns and improve their respective goals.

If we can properly optimize the value chain, we will move further towards competition with walled gardens, ensuring that a “high quality” open Internet is available to all. With the demise of the cookie in 2023, we expect many innovations in measurement, but unlike a decade ago, this innovation will be built with more understanding and knowledge of how to get the most out of the digital advertising.

If we get it right and move from individual relationships to industry relationships with transparency as the true walled garden differentiator, consumers and publishers will see a real shift in the value they get from advertisers. For consumers, these will be more relevant, informative and popular ads; for publishers, this will mean better monetization, user experiences, and larger addressable audiences.


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