When a supply-side platform sends out a bid request for an opportunity to advertise on a publisher’s website, the vast majority of the time, no one answers.
For SSPs, the typical fill rate is 1%. Executives from three major SSPs put it this way: there is a 1% probability that an advertiser or its buy-side tech partners will respond to a bid request that an SSP has sent out.
This is not to say that the inventory of most publishers is unmonetized. Particularly since header bidding was introduced about ten years ago, publishers deal with numerous SSPs that have the ability to submit multiple requests for the same slot.
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It does, however, indicate that there is a great deal of duplication—and occasionally inefficiency—in the programmatic supply chain, as we are all aware of, albeit maybe not to this degree.
There are countless supply routes available, none of which are particularly unique from the others. When you combine that with declining signal loss owing to cookies being deprecated next year, the projected $88 billion in open web monetization will only become more disorganized.
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“The number of supply paths has increased due to header bidding,” an unnamed SSP official stated. “It’s intriguing to see if they’re all contributing value.”
reducing the number of supply routes
Although there are only about 5 billion individuals with internet connection worldwide, SSP TripleLift’s gross request volume is hundreds of billions every day, according to chief product officer Andre Eifler.
He went on, “Those numbers don’t really add up.” “There are a ton of redundant supply paths, for sure.”
Despite the fact that publishers and brands have been reducing supply routes for years under the guise of supply path optimization, concern over the programmatic supply chain’s inefficiencies is only growing.
According to data released by trade association the Association of National Advertisers, the typical advertiser employs 19 SSPs. Between 5% and 20% of media expenditure is spent on fees by the top 25 SSPs utilized by companies, whereas between 40% and 83% of income is paid to the publisher. It is advised by the ANA that brands collaborate with five to seven SSPs.
According to a different survey, 38% of brand marketers are attempting to improve their SSP activity in the interim. Speaking during the tumultuous SSP environment earlier this year, publishers concur that their tech partners should provide specific features and chances for selling instead of just creating demand.
Should a bid request land in a woodland
The fact that there are so many ignored bid requests does not always mean that open web publishers are facing an existential crisis.
“On occasion, we receive [ad request] calls for pages that are completely ad-free, or we receive calls asking for five different ad sizes, or we receive calls even after the ad has committed to a sponsorship advertiser,” Eifler stated. “There are far more requests than there are opportunities for advertising.”
Frequently, a bid request is made in reference to a group of eyes rather than a specific ad spot. Furthermore, a publisher may try to make money from a single ad position in a few different ways. For instance, according to Eifler, the website might accept two short banner ads or one large one.
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However, the first executive stated that the 1% figure is crucial to the economics of SSPs. It would be problematic for an SSP if the fill rate dropped below 1%. The executive continued, “That firm would have more profit margin to play with if it grew.”
The fact that fill rates across SSPs are similar reflects the maturity and occasionally commoditized character of open online auctions, in which SSPs compete to provide advertisers the lowest CPM (cost per thousand impressions).
As an executive at multiple sell-side ad-tech businesses, Mike Brooks stated, “[SSPs] are at the end of the innovation cycle.” Additional services offered by SSPs, such as SPO, may exhibit greater provider differentiation.
decreasing supply because of a lost signal
Additionally, less supply is being monetized in the context of unanswered bid requests. Here, signal loss—a distinct phenomenon—is the culprit.
“There’s no desire to make money off of unidentified inventory,” another SSP executive source claimed.
Since Safari’s deprecation in 2017 and the iPhone’s removal of identifiers in 2021, Apple’s rejection of third-party cookies has had a significant but slow impact, forcing mobile ad-tech companies to turn to fingerprinting in order to continue monitoring. According to Brooks, Apple has been gradually plugging gaps, though.
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