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Getting in Bed with Supply Path Optimization – Webinar Transcript – 07/23/2020

Brian Blondy, July 27, 2020

Ben Erdos:  A very warm welcome to our little virtual event. To introduce myself. I’m Ben from Total Media. We’re a Google Certified Partner on both the buy side and sell side. We help publishers and advertisers, connect to and navigate the programmatic ecosystem. The aim of these events is really just to build a community and a forum of digital professionals and publishers, interested in media and give them a place for insightful content and a forum to ask questions and converse.

Today, as the title suggests, we’ll be uncovering SPO, which stands for Supply Path Optimization. We’re very pleased to be joined by two guests, both veterans of the industry and both from different sides of the ecosystem. So, it should provide a nice rounded conversation. But before we introduce them formally, I’ll kick off with a definition of what SPO is, for those that don’t necessarily know. So SPO is the practice of media buyers in the buy side in general to optimize their channels through which they purchase inventory. It’s not really a new idea. It’s been around since 2017. But because of changes in platform economics due to the COVID pandemic It’s certainly got kind of an uptick in terms of interest and talk around in terms of where we sit.

So, with that kind of covered, I can introduce our guests formally, Yanir Yudovitch, who’s the CEO at VTV.studio, and content creator focused on creating viral content. He’s going to talk from a publisher’s side and we’re also joined by Lisa Kalyuzhny, who heads up Demand for a EMEA for Pubmatic.

And we’re really pleased for her to represent platforms and ecosystem in general. And she’s also part of the IAB committee for transparency. So we’re very glad for her to join us today. As usual the format’s going to be a one on one conversation with each of our guests. Where we’ll try and answer questions from the crowd that we got when you guys registered. If we didn’t manage to answer your questions, then please feel free to contact my team and I’m sure we’ll get them answered to you. Great, so if we can bring up your near I think it still has our camera issues, but we’ll bring them up anyway. Yanir is CEO of VTV Studios, content creator excelling in producing stories with virality. How are you doing?

Yanir Yudovitch:  Hey, very well, Ben, thank you for the introduction. Happy to be here today. First time for me and hopefully everyone will enjoy a fruitful conversation.

Ben Erdos: Great stuff. Well, we’re glad to give the opportunity for people to hear different voices in the ecosystem. So why don’t you start off by sharing your thoughts as a publisher on SPO?

Yanir Yudovitch: Yeah, so I’ve been hearing a lot about it, it’s not a new thing. Optimizing the supply path, is something that I believe that as a publisher, is a goal from the publisher side, but it’s fair to say that it wasn’t a main focus for publishers out there. I think that, when you’re saying SPO, people automatically look at SPO as something that is coming from the advertiser side or the DSP. And if, if I can point out one company that excels in Supply Path Optimization, I would point out the Trade Desk, who basically identifies what kind of pipe it can be an open RTB pipe, it can be other kinds of integrations and basically narrow it to, to a place that they understand that inventory, same inventory that is coming from from, from different sources at different price points. That’s an anomaly to solve. And I think that that’s a great idea, in theory, but in practice, we are still far away from optimizing the supply path truly.

Ben Erdos: That sounds like a good overview. So, talk us through in terms of a little bit about the practicality of how that’s really impacted you guys as a business.

Yanir Yudovitch:  Yes, so you can see it coming from different DSPs today. You’re used to as a publisher, and of course as a company to strive to profit out of its business. You always want to make sure that you’re monetizing a lot of your inventory and, and you’re selling it at the best price you can get. And I feel like that that, that as a publisher, Supply Path Optimization coming from DSPs was to begin with a cause the drop in prices and when you, when you look at it in a, in a way that that, basically if you want to sell your inventory to advertisers, you got to add value. So, if you’re working with a rainbow of SSPs, but those SSPs they’re not providing you the right demand and the demand is coming from the open exchange.

I can really understand the Trade Desk approach and the fact that they want to buy from one reliable source. So, you choose your SSPs better, you basically develop a relationship with them that will allow you to bundle your users to create your own audience and then sell it to the right SSP or to the exchange that will eat the most out of your inventory, and that’s not only on the technical part of the stuff, it’s mainly coming from an angle of a relationship. So, you bundle your inventory and sell it. You package it well. And you manage a relationship with a one, two or three very good SSP that will do that will do the trick. As a publisher, we minimize the amount of SSPs on the either bidding part and on the server side integration.

Ben Erdos: And so, so with that developed fact, you find that platforms like the Trade Desk have a preference for any particular technology or do you think it’s a very much a bespoke approach depending on the publisher itself on what channels they’re using to connect to the trade that spikes and which ones are creating the better value.

Yanir Yudovitch: So alongside tech and technical integrations, which is very important. I feel that a company like the Trade Desk and like Google, who wants the biggest exchange out there. I think that quality is also an issue and if you treat your users with the right, if you provide your users with the right content, you can create value. And if you bundle your users, you can create value for advertisers. Forget about the tech companies, forget about the trailer. So I’m talking about agencies, talking about brands that are looking to advertise, like in our open exchange and in private deals. They’re looking to advertise to a very specific audience and if you can provide it as a publisher, you have an edge.

Ben Erdos: So, you talk, number of times in terms of packaging your inventory obviously without giving away some your secret source, you’re able to give us some success stories that you’ve had in terms of packing up some inventory and making it attractive to the SSPs, and on their behalf the DSPs that are buying.

Yanir Yudovitch:  Yeah definitely so we understand the audience. So when a female or a teenager or let’s say, a range of ages between 30 to 35 of foodies, it depends on our content creation and it depends on what content is being viewed and for how long your users stay on a session and how engaged with the content. So, to give you a specific success story, I would say there’s paid distribution and does organic distribution via Facebook pages or via SEO. So, for us as a publisher that is also buying the users from different social platforms, it’s easier to bundle.

So let’s say Facebook users who have an interest in food, so you create your own audience in DSP, and then you sell it in the Ad Exchange marketplace. Buyers provide you with offers usually, when you package your inventory, you can price it higher because advertisers have transparency into what they’re buying. And if your inventory at the end of the road provides results and engagement with ads. This is what you want to strike. So, there’s no specific success story, but lots from our inventory, I would say 25 percent today sold via private deals. So, I think that’s the main thing.

Ben Erdos: Not that I think that in itself, it’s a success story in terms of the ability to package that up and to really transact on programmatic direct in that way. Do you in terms of SEO in the experience you’ve had, obviously, you touched on it a little bit, there was a fear that SPO was driving down the RPM of the page and that kind of stuff. But are you able to touch on that in terms of some of the bad sides that you’ve seen or maybe experienced with some of the SPO you’ve been doing or have occurred.

Yanir Yudovitch: Yeah, I mean, I want to point out one case, but I would say that when we started to experience SPO, we’ve seen pipes that used to work suddenly goes from 100 to 0, because of because of a sudden closure of an integration, let’s say, tax integration. It’s very rare to get these kinds of integrations and when you have a legacy relationship with companies like that, and the same, and suddenly there’s an integration who used to work with you on a regular basis for a long time, that’s, that’s a bit of an inventory that you used to sell. I would say if anything advanced and suddenly in one day, because of duplication, because of inventory, it’s flowing on different prices from different SSPs.

You know, there’s the SSP fee and there’s the DSP fee. So, the buyer ends up getting the same inventory and different prices. When you look at it from a point of view, removing those SSPs that harm your CPM, that’s the goal. So, on a short term, you see inventory that you were used to selling, on a specific integration suddenly stops. But when you understand the root of it, then you understand that you need to, you need to treat the advertisers better. And you need to show them transparency, and everything you can give them in terms of information about the user that will help them convert, that’s the way to make CPM, and the users that are visiting your websites, but the other advertisers are not looking for the eminent users, you better focus on your, on your valuable users. Rather than that.

Ben Erdos: That makes sense. And I think, next question is what would you recommend for publishers that are starting to have these conversations with their SSPs regarding SPO?

Yanir Yudovitch: Yes, so I think that’s, it’s going to be a little bit more of the same because I’ve touched a bit in, in what we did, when we first experienced this SPO. So, I would say that picking the right partners, SSPs that has foot on the ground has self-esteem, they know how to sell your inventory, and manage the relationship with their demand curation guys, make sure that you provide enough of enough of information to the different SSP sales guys, make sure to push with your account managers, make sure they know your inventory and make sure they know you’re a valuable publisher, focus on good content, have user engage with your content and user users that are engaging with content and having a long time in a page or in a session, those users are valuable for a publisher. So, make sure that your content is good enough but make sure that your content is highly engaged and that you pick the right SSPs. This is the recipe as far as I can see.

Ben Erdos: That makes sense. I think that’s some good advice. And kind of, if you just were, I’m gonna put you on speaker and ask you to kind of look through that crystal ball and say, where do you think this whole journey is kind of taking us to?

Yanir Yudovitch: That’s a very good question. I believe that the intentions are good. So, when the intentions are good, and most likely it will end up in a good place. So, companies that are leading that space like Display and Video 360. Today they are basically leading supply optimization. And those guys, you know, that they want the programmatic ecosystem to thrive and, and I believe that by, following the guidelines there, as a publisher, and it would benefit us as well. Even though you’re seeing different SSPs performance.

You’re seeing companies like Google advertisers, buying ads from different platforms. I think that looking at it in the long run, that will only benefit.

Ben Erdos: That sounds really good. And thank you very much for that insight and joining us today will be our pleasure to invite Lisa Kalyuzhny, who runs demand in EMEA for Pubmatic and to talk to us more about the platform side of SPO.

 

Lisa Kalyuzhny:  Thanks so much. Really great to be here and try to give the best of my opinion and obviously demand, or SPO from a demand perspective.

Ben Erdos: That that would be great. And I must say I’m very jealous of the couch right now.

Lisa Kalyuzhny:  Yes, the benefits of working from home, this is my office. So my boyfriend gets the spare room with the desk and I’m just happy to be on the couch. So it works.

Ben Erdos: I think you got the upside of that one.

Lisa Kalyuzhny: I do too.

Ben Erdos: Why don’t you start us off and really give us the overview of how programmatic views SPO?

Lisa Kalyuzhny:  Yeah. So again, as I said, I think a lot of it, I just want to make sure like this is my opinion, this isn’t the Pubmatic official stance. And so, what I like to do, so we do a number of these SPO one on ones for buyers, to help them kind of understand how the ecosystem has gotten to where it’s gotten. And how I tend to start it off with is we have this great image of like a bizarre so this is an analogy that came from Digiday to describe SPO.

Imagine you’re in Istanbul, you’re heading to the Grand Bazaar, you arrive and you see all these merchants with the same textiles and you wonder who’s got the best quality most direct to the weavers and of course the best price. So, you choose who you assume will have all of those because you’re a tourist, and you don’t know, but of course you’re not sure. So, imagine the same situation, but you’re walking into the background and Bazaar as Local and you go directly to the stall, you know. And that is obviously working with the best textiles has the best price and you know exactly what you’re negotiating. So that’s actually what’s happening in the programmatic ecosystem. Now, the savvy buyers are getting the best price and the quality inventory, whereas like those tourists and not novices may actually not be.

Ben Erdos: That’s, I think that’s a great analogy. I think we’ll kind of get next is how you would relate that analogy to, to the kind of a techie but actual platforms and specifically pragmatic.

Lisa Kalyuzhny: Yeah, so I think it’s about the ability for both publishers and buyers to have visibility and transparency into our pipes. So Pubmatic has huge eyes and ecosystems on both for a publisher, so you can log in and you can see who’s buying and then the buyers have their own platform as well. We call it the media buyer console so they can go in and see what’s happening in the office. What inventory they’re buying and making sure that, you know, the supply that we’re getting, obviously his ads.txt sellers, J.SON, all of those kind of terms that the IAB has created, and also that the demand is vetted and not it’s brand safe and there’s quality and stuff as well. I additionally add, I think IAB Europe.

As you mentioned, I sit on the programmatic trading committee. And we put together a guide recently called the supply chain transparency guide. And it highlights all the questions that each part of the ecosystem should ask. So it’s a great tool for publishers that may not have that direct relationship with SSPs or agencies to think about the questions that they should be asking and understand kind of how the ecosystem is looking at all of this, what inventory they’re buying and making sure that, you know, the supply that we’re getting, obviously is Ads.Txt, Sellers.Json, all of those kind of terms that the IAB has created, and also the demand is vetted and not, it’s brand safe and there’s quality and stuff as well.

Additionally, I think IAB Europe, as you mentioned, I sit on the programmatic trading committee. And we put together a guide recently called the supply chain transparency guide. And it highlights all the questions that each part of the ecosystem should ask. So it’s a great tool for publishers that may not have that direct relationship with the SSPs or agencies, to think about the questions that they should be asking, and understand kind of how the ecosystem is looking at all of this.

Ben Erdos: No, that’s really great. And we’ll be sure to share that link out to the group as well, so that they can all kind of read that. What do you see is the driving, drivers of change in adoption of SPO.

Lisa Kalyuzhny: Yeah, so I think that because I sit on the demand side, it’s definitely the agencies. So they’re the ones that are looking at consolidation. They’re looking at the pipes and saying, Wow, I’m looking into my DSP, and I’m buying from 130 different SSPs. And that inventory that I’m buying, can I get it from everywhere. And so they are the ones that have the buying power to say, You know, what we don’t want to buy from these long tail exchanges, we want to say, these are our partners. This is who we know, we’re getting the best quality inventory from, and also the shortest link to that supply. And then just working with that, you know, whether it’s, we’ve seen people go down to one, we’ve seen people go down to three to five to 12. But that consolidation is definitely happening. And I think it is being driven by the agencies and or the advertisers in that case.

Ben Erdos: That’s really good and insightful. And in terms of the signals that the agencies and the advertisers are looking at those quality signals, in terms of when they’re making their evaluations, do you have any that you think could be useful to highlight to publishers. They might be seen as well to be able to raise their bar and become more attractive when it comes down to SPO?

Lisa Kalyuzhny: Yeah, I mean, viewability is the first thing that buyers look at. It’s something that. So I moved over to the UK market four years ago. And in the US, we were talking about viewability, and when I moved over here, it was like something, it was a new term that publishers and buyers were like, Oh, we should start looking at this. And I think that it is 100% something that buyers look at. And they’re getting to the point where they’re saying, We only want to buy inventory that’s in view, and using the likes of IAB and Vote to verify that. So they have the partnerships in place as well with them, and they’re looking at that reporting and they’re optimizing very quickly against inventory that’s not viewable. So that’s a quick and easy way for publishers to figure out how I get my inventory to be in view and be able to measure that?

Ben Erdos: No, that absolutely, obviously makes sense. Is there anything in addition to viewability, things that are valid as the publisher is, is just the core one?

Lisa Kalyuzhny: Yeah, I think the viewability is definitely the main piece. I think inventory quality and brand safety are also very important. I know we have an inventory quality team that vets every single publisher that comes through our pipes. And they’re looking at making sure that you know, it is quality content, that they’re not just these kind of landing page sites where it’s stock photographs and stock articles that are then going to, you know, these kinds of fake ads. So making sure that it is quality content that is being produced. And also fraud. So, a number of the big six holding companies have put together these what we call codes of conduct. So it’s part of their SPO process. They’re going to their exchange partners and saying, We need you to, if you want to work with us, we need you to sign these. And part of that is being able to do a fraud-free guarantee. So we launched our fraud free program last, I think two years ago now, and have worked with both the buy side and the sell side to make sure that what’s coming through our pipes and being able to refund any sort of fraud that we identify. Now, from a publisher perspective, it’s also really important to make sure that your work, you know, the content and the stuff on your sites is verified and not fraudulent.

Ben Erdos: No, that absolutely makes sense. And I think that’s a very good initiative to kind of be pushing out there from the promoter site in terms of fraud free. So in terms of, obviously we’ve got the viewability and that kind of stuff, but in terms of the actual process and how you would advise publishers that are starting to have those conversations or starting to see the impact of SPL, what would you kind of advice to them as knowing the other side of the SPO conversations? What’s the best thing to manage?

Lisa Kalyuzhny: I think it’s all about relationships and asking questions. So oftentimes, we don’t know what we don’t know. And I think that supply chain transparency guide really helps, I think, understand not only what the publisher should be asking, but again, what the agency and the advertiser will be asking from the publisher. Because any conversation that anyone has, you want to come prepared. So you want to be able to have that ability to answer the questions that the buyers are going to ask, and make sure that you are putting yourself forward in the best light possible.

Because, as we all know, getting meetings with these agency people is extremely challenging. And you want to make sure that you are offering value, and that you’re not just another vendor knocking on their door trying to sell them the same thing that the other 20 guys have tried to sell. So identifying you know what is your USP, what are you bringing to the table, and also listening to them and say, I know, these are the problems that they’re trying to solve for, making sure that you have the tools necessary to help them solve those problems. And then just I think education and relationships are the two most important ones.

Ben Erdos: Now that makes sense. And you still think there’s a good place for this, for the good old traditional kind of media kit and helping kind of package that out and to drive those conversations.

Lisa Kalyuzhny: Yeah, I mean, I think that buyers are definitely looking at optimization. And they’re looking at it and saying, You know, if I’m not buying one to one, can I possibly buy one too many. So then it’s looking at verticals and it’s looking at audiences. I think the other piece of what is important is data. So what first party data can a publisher bring to the table that can make their offering unique, that can be relevant to the buy side. And that obviously strengthens everyone’s conversation and helps them remain sticky.

Ben Erdos: Now, that’s definitely a good kind of driver, and I think data in of itself is a whole different rabbit hole that we could probably go down to in terms of quality environment and that kind of stuff. But back to that kind of question in terms of what, as a publisher looking to build their first party data offering in order to kind of drive value, which kind of audience and demographic data do you think is valuable to the buy side?

Lisa Kalyuzhny: I mean, anything that they can dissect, and, you know, buyer intent, and obviously, you know, age, gender location. I mean, I think that as we spend more and more time at home, and you know, maybe 2020 will be the year of mobile, and we’ll be able to actually monetize, you know, and do that well. Because I think that as much as more and more eyeballs are moving to in-app, the agencies are still having that thought process of, Oh, I can’t measure an app, I can’t track it. So any publishers that have, you know, apps and have the ability to do things like the OMSDK, and get that to be an attractive, because that allows you to track and it allows you to measure, and that way allows the agency to understand the success of the campaign will strengthen like that offering, and that’s additional data fields and inventory that the buy side is definitely interested in.

Ben Erdos: No, that’s definitely. That’s great. And that really made sense. And in terms of asking, kind of the last question in terms of where do you see kind of SPO developing to both in terms of what you see coming through from the conversations on the IAB and also just in terms of conversations with the big six agencies.

Lisa Kalyuzhny: Yeah, I think it’s definitely a consolidation process, and that they are all going through and doing these kinds of codes of conducts and building out these RFIs and selecting partners and looking at, you know, who’s gonna really remain from the hundred and 30 different SSPs that they buy from. So I think it’s just going to keep consolidating, and consolidating, and we’ll see kind of the long tail supply get relegated down. And whether they’re still relevant next year and a couple of years, I think that it’ll be clear to see who the winners and the losers are. I also think publishers are going to be looking at things like DPO. So just to add another acronym into the mix. So a publisher now has the ability to see how those impressions are bought. So it provides them that insight to identify where and who they want to sell that inventory through. So they understand how those bidders like to buy their inventory, and then they’re going to optimize accordingly. So they’re going to do their own process of this.

Ben Erdos: So you think just the two will converge in the middle and find a happy balance in terms of those publishers are looking to cut supply or demand partners based on the value they bring. And from the top down in terms of buyers working the other way around.

Lisa Kalyuzhny: Yeah, because I think it’s all about, you know, going into the public to the agency meetings and talking about your SSP, is also the same conversation that we have with publishers and talking about our SSP. So it goes back to what you guys were talking about previously, is making sure that the SSPs that you’re working with, have this team, have the kind of support that a publisher is looking forward to be able to not just have, you know, the conversations direct with the agencies, but also making sure that your SSPs are having those conversations for you, and that they have the ability to do that, and have those relationships. Because at the end of the day in this business, I think you’re only as strong as your relationships. And it’s not about who you may or may not have had a LinkedIn conversation with six years ago, but it’s the people that you’re sending WhatsApp to, and that sit across from you on a Saturday night at the dinner table, because you know them that well, and they’ve become part of like that group of friends that you have within ad tech, that those are the people that, you know, strengthen who you are and how successful you can be.

Ben Erdos: No, I think that makes absolute sense. And I think that’s a kind of a nice point to kind of, to wrap up with. And it’s where the ecosystem is going with commodification of tech platforms and processes and inventory, ultimately we’re going back down to business basics, which is really just focusing on the relationships with people, and using just tech as the enabler for it.

Lisa Kalyuzhny:  Yep, yeah. 100 percent.

Ben Erdos: Great stuff. Well, thank you very much for your time, Lisa. It’s been insightful, I think you’ve given the publishers and everybody on the kind of the call the right nice insight in terms of how SPO is viewed from both the IAB and from buyers. So I think that’s great. I think we covered most of the questions that got sent through from the crowd. But thank you very much to everybody for joining and sending in your questions. We’ll follow up with the framework that Lisa mentioned from the IAB in the follow up with the video and everything else afterwards, if we didn’t cover your questions, please reach out to our team. And if you’ve got any suggestions for guests or for topics you’d like to cover for our next one, please just let us know.

Thank you very much and have a great weekend.