SPO and nToggle: The Next Stage in Ad Tech’s Evolution
It was announced this week that Rubicon Project has acquired nToggle, a leading startup in supply path optimisation (or SPO, because after all, who doesn’t love a three-letter acronym?)
Since Netric is responsible for the expansion of Rubicon Project tech across the Nordics, we wanted to explain why this is great news for our publisher customers, as well as the many buyers we work with across the region.
With the rise of header bidding especially, our field has arguably become more complex than ever – despite our own efforts to educate and explain how it doesn’t have to be this way. And we believe the addition of nToggle’s smart tech and people is another important step towards a clearer, more effective and profitable marketplace all round.
Header Bidding’s Skeleton Key
It won’t be the first time you’ve heard this, but header bidding has seen huge adoption by publishers in an impressively short space of time.
Once upon a time, we had ‘waterfall’ ad server setups, stacking demand sources in a predetermined order, based on assumptions of their worth. But with the advent of header bidding, they compete for every impression. And that’s as it should be in a market that functions in real-time.
But the flip side of what started as a hack in the header, is a range of side issues – many caused by less scrupulous ad tech players prioritising their own short-term gain.
Sorting Good from Bad
From the publisher side, short-term gain can actually mean long-term pain. Take, for example, the case of the first price auction. Switching to first price, you might well sell a number of impressions at a higher rate. But when the DSP sees they’re paying over the odds and shifts spend elsewhere, ultimately, this only benefits the exchange. Overall, the publisher will end up out of pocket.
For buyers, the potential issues raised by header bidding are if anything even greater. Duplication of inventory (of course, many SSPs have the same customers), the above-mentioned gaming around first/second price auctions, as well as the ever-increasing cost involved in ‘seeing’ an overwhelming volume of impressions.
A Piece of the SPO Pie
Long story short, SPO is an answer to many of these concerns. Ad tech consultant Paul Gubbins has a good rundown of all the various SPO scenarios for buyers in ExchangeWire. But in short, some of the major benefits include sorting good from bad, and thereby seeing 5x more inventory, cutting costs and increasing win rates while lowering costs. With lowered infrastructure and operation costs, the promise then is they can invest in innovation, developing a more customised approach.
And as knowledge around supply path optimisation grows, smart publishers will also want a piece of the pie, to more effectively surface their inventory, and maximise spend – as well as reducing latency and cutting overhead costs.
Signal in the Noise
In the words of Rubicon Project President and CEO Michael Barrett, “Integrating nToggle’s technology into Rubicon Project’s platform enables buyers to find the ‘signal in the noise’ so they can bid more confidently, win more auctions, and spend more with our publisher and app clients.”
“This acquisition underscores our commitment to strengthen the Rubicon Project exchange with tools and services that make it easy for buyers and sellers to transact. The needs of our buyers changed with the introduction of header bidding, and nToggle’s technology enables us to address those evolving needs.”
As CTO Tom Kershaw also put it, quoted in AdExchanger: “This business used to be about exclusive access to proprietary inventory,” he said. “As the industry moves forward, it’s become about who’s faster and better and easier at mapping buyers and sellers together.”
Will SPO be the next stage in ad tech’s evolution? As ever, it’s impossible to know 100% what the future holds, not least in advertising.
But what’s for sure is that SPO and nToggle make what has become an over-complex marketplace simpler. And they promise to bring an infrastructure was struggling – both technically, and in terms of cost – back under control.