A transparent supply chain is good for everyone

Clay Gill
By Clay Gill | 7 October 2021
Clay Gill.

By Clay Gill, CEO, Matterkind Australia

If you have the time, take a look at IKEA’s supply chain vision. It helps present a nice perspective of how one could view Programmatic Supply Path Optimisation (SPO);

“…. its various functions (supply chain operations and inventory management included) work together to support its distinctive value proposition.” 

In May 2020, PWC carried out a study on behalf of the ISBA (Incorporated Society of British Advertisers) – which found there was still an unknown delta in the programmatic supply chain, suggesting once again murky supply still exists. Not only did the report conclude it was murky but the complexity within it contributed to a markedly opaque supply chain.

Didn’t we all agree with Marc Pritchard way back in 2017 that murky is not the right way to go?

Three years after Pritchard’s statements, PWC concluded that nothing much had changed. It was a damning indictment on our industry (trust being at the heart of it) and something we took quite personally at Matterkind.

In ad tech, some of the challenges have been related to fees, number of participants and auction transparency. With contributors on the chain not fully justifying their “value proposition” to either the advertiser or publisher. Hence murkiness is found when non-working media participants are either unidentified or not adding value.

A sound marketplace therefore is where SSP’s (Supply Side Platform - adtech that enables publishers to manage their ad impressions inventory and maximize yield) are more accountable and transparent, adding distinctive value. Because these days their client is not only the publisher but the advertiser too. The same could be said for DSP’s (Demand Side Platform – automated buying platform, where advertisers can purchase inventory) who could improve their solutions to reward publishers that are performing well and successfully augment advertiser’s strategies. It’s in this area we remove the murky doubts about who’s on the supply chain and what exactly are they doing?

The ACCC ad tech enquiry has therefore just concluded what we already knew, which is there’s a need to establish a supply path which is overtly transparent, highly simplified and with obvious contributions from all involved. One that offers value to both advertiser and publisher. After all a healthy marketplace is a trusted, fair and competitive environment where both buyers and sellers can find price discovery.

To combat this murkiness Matterkind has already embarked on a process of Supply Path Optimisation which resolves most of the charges in the ACCC report. We conducted a tender where SSP partners were asked to participate in the following areas:

  • Full transparency with the provision of log level data – allowing auditability
  • The ability to generate value - towards either the advertiser or publisher
  • Solutions that support campaign performance improvements for our clients

After a review of 11 major supply partners with the aim of gaining full control of the supply chain, and with selected willing partners – Matterkind created a completely transparent and more efficient supply chain. Those initial partners were Index Exchange, Pubmatic, Triplelift, OpenX and Magnite.

Furthermore, our DSP partners were invited to customise their technology to reward those SSPs who were aligned to clients’ needs and transparent approach. Through extensive tests across our DSP partners’ technologies, we surfaced significant advances in all three areas reviewed.

  • Fully auditable log level transparency in our supply chain
  • 55% reduction in effective CPM costs
  • Auction win rates improving by as much as 40%, naturally boosting campaign performance
  • As much as 60% improvement in Reach
  • Average reduction in non-working media costs of 5%

But what is most pleasing is the shared success and trust gained from both the advertisers and publishers from this initiative.

Janette Higginson, Index Exchange’s Head of Demand for APAC said, “Transparency in the supply chain allows for a more efficient buying process, providing agencies with the ability to drive and showcase results to their clients effectively, which is something we at Index Exchange are very passionate about. We’re delighted to partner with Matterkind as they continue to spearhead their SPO effort in the Australian market and we’re looking forward to growing our partnership, driving the most efficient, effective, and transparent path to programmatic supply for our customers’.”

Flaminia Sapori, National Head of Partnerships and Strategic Investment, said “SPO is the biggest change we can make as media buyers today and the best way to address supply transparency. Through our DSP and SSP partnerships, we’re able to provide full transparency and auditability of the supply chain for all our clients. Increasing efficiency of our clients working media and in return advance publishers’ yield”

It’s encouraging that key stakeholders in the Australian media landscape are finally agreeing the way forward – and it’s a win-win for all involved. It galvanises the view that we should not accept unknown deltas, aggregated audience numbers or in-auditable supply of media. Advertisers and publishers deserve a clean and transparent line of sight. Without it, access to great content is diminished, publishing quality erodes, great brands fade, but most importantly we as consumers lose.

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