A redundant, multiple-step process to ad delivery has become the norm, but in the process has created a waste of dollars, energy and carbon. With a growing emphasis on sustainability in the ad tech ecosystem, savvy advertisers have an opportunity to innovate and create solutions to combat the problem. What follows is based on the presentation ‘The Future of Green in Advertising: Radical Transparency & Sustainability’ by Arthur Hainline, vice president of product at Bidtellect and Chris Kane, founder and president of Jounce Media.

How we got here: header bidding led to supply path inefficiencies and carbon waste

With the adoption of header bidding, publishers could use multiple ad exchanges through which each DSP could bid. However, DSPs were designed for the one-publisher-one-exchange model preceding header bidding. That technology used the number of bid requests received as a proxy for how many impressions were available for bids. As a result, DSPs often have to bid multiple times via multiple supply exchanges for the same impression. Their original pacing mechanisms attempt to capture a larger share of demand in this multi-exchange model.

In addition to working with multiple exchanges and integrating those exchanges through numerous connection points, publishers often enable one exchange to resell another exchange’s auction. However, very few publishers have no reselling of their inventory. This is what’s called a hop in the supply chain. A hop is a case in which one exchange resells another’s auction without adding value.

A short multi-hop supply chain starts with the DSP paying Exchange B, which pays Exchange A, which is then integrated with the publisher through pre-bid. Every single impression opportunity is being duplicated over and over again. And even though reselling might dilute the publisher’s payout, volume bias encourages that team to continue it; better to take a discount on a dollar than let that dollar go to a competitor.

All this reselling, duplication and volume is creating waste in the form of server-compute time when a DSP sees multiple auctions for what is really the same impression opportunity, unnecessary energy consumption thanks to the resultant server-to-server communication to resell an auction. All of this creates carbon emissions.

Contributors to supply chain redundancy

The redundancy of supply chains is the number one cause of supply inefficiency, carbon inefficiency and lack of transparency in the supply path. Buyers and sellers have redundant supply chains due to numerous factors, including auction duplication, multi-integrations and reselling.

It is overwhelmingly common for one publisher to have multiple partnerships with supply-side technology companies and ad exchanges. This leads to auction duplication, with multiple companies running auctions simultaneously for the same impression.

Similarly, it is overwhelmingly common for each publisher’s exchange partners to integrate with a given publisher through multiple connection points. …read more

Source:: Digiday

Author: Aaron