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The demand for cookieless targeting is fueling ‘SPO 2.0’

The demand for cookieless targeting is fueling ‘SPO 2.0’

The term supply-path optimization (SPO), has plagued ad tech companies for years and now has a renewed resonance as media buyers still demand precise targeting, even as traditional tools of the trade have eroded.

It’s a trend highlighted by Havas Media Group’s recent search for ad tech partners, a process that saw PubMatic named among its roster of “preferred supply-side partners” for its clients in the North American market.

The process saw it further reduce its number of SSP partners from five to seven (in 2018 this number was as high as 42) with the latest iteration of HMG’s annual hunt for ad tech echoed elsewhere on Madison Avenue.

At the core of the pair’s renewed partnership is “data activation,” or more plainly, the ability for HMG’s clients to target audiences on PubMatic inventory without third-party cookies. This is enabled through the recently unveiled audience management platform Converged which can identify audiences via a partnership HMG struck with LiveRamp, a separate ad tech company.

From here, HMG sends a list of audience types its clients want to target to PubMatic via LiveRamp’s encrypted identifier with the SSP subsequently using its platform Connect, a tool that supports a range of cookieless identifiers, to flag relevant opportunities. HMG then purchases the corresponding inventory via a third-party demand-side platform.

Evolving RFIs

In a statement, Andrew Goode, evp managing director, investment, HMG, said the latest iteration of the tie-up will help clients bolster their return on ad spend, especially in a “shifting addressability landscape” that requires scale and efficiency.

“The RFI [request for information] process is to ensure that we are able to adhere to the principles we originally set out as we enhance access to data,” Goode told Digiday. “These things evolve and one of the things we look at is preparedness for ways of working in the cookieless future and those that will enable us to work within the growing maturity of the data marketplace.”

SSPs, they have data signals we can’t necessarily get from a DSP

Tom Grant, svp, group director, investment operations, HMG

Meanwhile, Tom Grant, svp, group director, investment operations, HMG, said such tie-ups were crucial, especially as “about 75% of bid requests” it sees don’t have cookies anymore. He added, “We need these new ways of working… We’re acknowledging the increasing importance of SSPs and this partnership [with PubMatic] is a reflection of that, they have more data signals that we can’t necessarily get from a DSP.”

John Speyer, senior director, advertisers solutions, PubMatic, characterized the renewed partnership as indicative of how buyers’ SPO efforts had grown more sophisticated compared to the days of simply culling shady partners.

“We’re focused on a new level of SPO, where it’s moving beyond [quality of media] supply and more into an addressability play,” he said. “Supply-side data activation is key… I would characterize it as 2.0 of how SPO looks.”

Such partnerships, or “trading deals” as some would characterize them, are always subject to commercial T&C’s although both HMG and PubMatic’s spokespeople declined to comment on such details when probed by Digiday. Albeit, they also come at a time when the traditional roles of online media are in transition, and this is likely to have an impact on commercial relationships.

Blurred lines

The HMG partnership is not the only such deal that PubMatic has struck this year, as it was also named as part of the GroupM Premium Marketplace along with fellow SSP Magnite — such deals are now key to the ad tech companies’ messaging to Wall Street.

Partnerships between media agencies and SSPs — relationships that were traditionally facilitated by DSPs — are increasingly being formed at a time when the fault lines between buy- and sell-side ad tech companies have become increasingly blurred.

For instance, earlier this year, The Trade Desk announced an initiative that proposes direct integration with premium publishers in a move that many interpreted as a direct threat to the traditional role of SSPs. Although, not all are convinced of the inevitability of conflict among the industry’s intermediate tiers of ad tech with Bob Walczak, MadTech Advisors CEO, pointing out how such arrangements often involve the DSP executing a media-buy.

He further told Digiday that partnerships between SSPs and holding companies are necessary for agencies to continue their traditional mode of targeting addressable audiences at scale while adhering to privacy requirements.

It is a small leap of logic to suggest we will see both DSP and SSP offering competitive solutions

Andrew Goode, evp managing director, investment, HMG

“It’s been happening for years, now they [SSPs] are going direct to the agencies and trying to get a preferred relationship… now that agencies have the kind of technology to support that type of relationship,” he said.

“These deals have to continue to happen because [when] third-party cookies go away you need to have a face-to-face relationship to be able to do these kinds of first-party transactions… needing to know your counter-party better was what started ads.txt and what we’re seeing is the evolution of this.”

However, HMG’s Goode explained to Digiday his opinion that while both parties aid in the transition to ad targeting without reliance on cookies, the “increasingly fuzzy” roles of the DSP and SSP could soon prompt change.

“Both DSP and SSP today have intrinsic value in the activation of campaigns, however, it is a small leap of logic to suggest in the near future, we will see both DSP and SSP offering competitive campaign activation solutions, independent from each other, and maybe consequentially a potential reduction in tech tax,” he concluded.

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