Directly competing with demand-side platforms (DSPs), supply-side platform PubMatic has rolled out its supply-path optimisation (SPO) solution Activate in the Asia-Pacific (APAC) region.
Available to publishers from October 3, fundamentally, this is an algorithm utilised by DSPs to refine their engagement with SSP; every DSP has cultivated a unique approach to SPO.
For example, certain DSPs employ it to select the bids that are exceedingly pertinent and boast the greatest probability of triumph. In contrast, some leverage it to disable SSPs that fail to execute second-price auctions, as per the information.
So why is PubMatic launching Activate? The SSP believes it enables buyers to smoothly execute non-bidded direct deals on PubMatic's programmatic platform, offering ad publishers access to premium video and Connected TV (CTV) inventory.
According to PubMatic, SPO has underscored the need for simplification and efficiency in digital advertising, particularly as agencies grapple with ongoing changes and uncertainties.
With the industry set to see 60% of CTV and 18% of online video transactions in 2023 through non-programmatic insertion orders (IOs), Activate hopes it will alleviate the programmatic marketplace's complexities, disparities, and opacity.
The reduction in operational complexity, combined with minimised time and cost, is geared to transmute insertion order budgets into the programmatic ecosystem.
Jason Barnes, the chief revenue officer for APAC at PubMatic, explains to Campaign that SPO materialised due to inefficiencies as agencies disseminate spending across 20 to 30 different programmatic exchanges, which was neither sensible nor transparent.
Decreasing this to a few select, trusted partners was fundamentally about enhancing efficiency.
"Agencies have been navigating turbulent times recently, with substantial pressures emerging. Over the past few weeks, I have learned about many regional layoffs," says Barnes.
"Agencies exist in what I describe as a state of dynamic stability—large, ostensibly stable organisations undergoing substantial internal changes, particularly around efficiency measures. Introducing this technology provides a new, more efficient avenue for SPO execution with their chosen SPO partners, whom we often assist in delivering substantial value through SBI (Supply-Based Initiatives)."
Barnes adds: "This is an opportunity to advance the SPO dialogue further and propose an additional step we can take within the SPO partnership."
By launching Activate, agencies can bypass traditional programmatic media buying through DSPs and go directly to PubMatic, which can potentially stir reactions from DSP partners like The Trade Desk (TTD). Fellow SSP Magnite previously launched a similar product called ClearLine.
It is worth noting that DSPs like TTD have also been trying to bypass SSPs like PubMatic and Magnite, with the launch of OpenPath, which allows TTD to go directly to ad publishers.
Barnes claims despite the capacity to book ad campaigns directly, PubMatic is not in competition with DSPs and instead wants Activate to coexist alongside or complement these platforms.
"When we converse with agencies, brands, and publishers, our message is about efficiently unlocking ad IOs, which precisely aligns with what DSPs are trying to achieve," explains Barnes.
"Therefore, our role is complementary, contributing to industry growth. It is crucial to note that we're not approaching agencies with the message that they don't need a DSP; our narrative is specific to certain situations."
PubMatic believes Activate will increase ad publishers' revenue and create an environment of efficiency and trust.
"Our goal is to enhance their ROI, allocate more to their working media, and heighten the efficacy of their campaigns," explains Barnes.
"They harbour significant concerns about workflow efficiency and trading efficacy, so our performance will be gauged against these metrics by both agencies and publisher partners. We maintain robust confidence in this domain."