It’s fair to say that programmatic ad buying has become the leading way for gaming advertisers to access mobile ad inventory. Global spending on programmatic advertising reached an estimated $588 billion last year and is expected to hit $700 billion by 2026. Even so, it’s not without drawbacks.

The growth of the programmatic supply chain caused publishers to shift from waterfalling, where demand sources are prioritised by their effective CPM (eCPM), to in-app bidding, a process that maximises returns by offering each ad impression through a unified auction. While this has many benefits, such as allowing smaller advertisers to compete with bigger companies for ad space, faster ad loading, and access to more demand sources (such as DSPs), it also creates multiple pathways to winning the same ad impression.

Since the same ad impressions are offered by different ad networks, DSPs often receive repeat bid requests from ad exchanges that artificially inflate prices, which are then passed onto the advertiser.

Unnecessary costs hurt any mobile app, but games benefit from increasing their return on ad spend more than most. The games industry is going through a challenging economic period, with widespread layoffs and many studios struggling to manage the demands of complex LiveOps strategies. Optimising ad budget helps boost user acquisition and ensures long-term profitability.

It’s here where Supply Path Optimisation (SPO) comes in, the process of finding more direct ways to access high-quality ad inventory. Below, we discuss how this works and dive into some of SPO’s biggest benefits, including improved performance and reduced costs.

Removing hidden fees and boosting performance

Your marketing budget is a precious resource, so you need clarity on exactly where your money’s going — and programmatic advertising can help advertisers find value. One widely circulated report from the ISBA’s Performance and Programmatic Steering Group in 2020 found that 15 percent of advertiser spending goes unaccounted for in the programmatic supply chain. Supply-side platform (SSP) fees are 2 percent higher on average than reported.

Added costs are a knock-on effect of in-app bidding, which results in many supply-side intermediaries “reselling” ad inventory and artificially raising prices. Ad inventory can be “resold” several times before being offered to advertisers, accumulating additional tech fees each time. Ad impressions can also receive multiple bids from the same DSP via different ad exchanges, increasing costs for the advertiser.

SPO strategies that remove unnecessary intermediaries from the supply chain can offer a more direct path to supply sources, eliminating the risk of duplicate bids, lowering costs, and improving ROI.

However, Liftoff's approach to SPO offers an added advantage. Our Accelerate DSP, powered by machine learning technology, provides access to ad inventory directly from the Vungle Exchange without the interference of costly intermediaries. This is highly beneficial for gaming advertisers, as the Vungle Exchange has direct access to a large group of publishers, with 95 percent of the top 200 gaming apps integrating the Vungle SDK.

The added benefits of Supply Path Optimisation

However, Supply Path Optimization does more than just reduce costs — it actively improves ad campaigns in various ways. For example, optimising the supply path and directing ad spend closer to the source means faster loading times for your ads. This reduces data delays and eliminates weak links, preventing frustrating slow loading, incomplete content, and rendering issues for users, which can negatively impact the quality of creatives.

Streamlining the supply path can result in better ad performance and improved targeting if you've partnered with a DSP utilising machine-learning models. ML models depend on the information they receive, and having multiple intermediaries in the supply chain can result in errors, inconsistencies, and discrepancies, lowering the overall quality of your data. For example, clean data allows Liftoff Accelerate to detect valuable bid requests better and determine the right market price, increasing our win rate, uplifting performance, and improving ROI over time.

However, it’s important to remember that streamlining the ad-buying process can impact the number of creative options available via ad exchange. Many SDKs vary in the creative options they support, meaning that if you don’t do your research, certain experiences could be taken off the table.

At Liftoff, we offer advertisers a wide range of creative experiences to work with and pathways to quality ad inventory. For example, our widely supported Vungle SDK is compatible with innovative ad formats such as long-form video and iterative playables. These are proven to boost conversion rates, with our recent Mobile Creative Ad Index finding that gaming ads with a video or playable element are over 20x more likely to result in an install than banner ads.

Choose a DSP that excels at SPO

Advertisers can cut costs and boost ad performance by streamlining their supply routes and removing unnecessary intermediaries. Still, it’s important to remember there isn’t a standardised approach to Supply Path Optimisation, meaning some companies can offer more benefits than others. At Liftoff, our platform allows us to chart a more direct path to ad supply and deliver insights that translate into supply-side and demand-side optimisations.

With that in mind, here are some of the key things you should consider when identifying a suitable DSP partner:

• Whatever the approach to SPO, your DSP should have a strategy for reducing duplicate bids.
• One of the biggest benefits of SPO is the ability to ensure your DSPs can access clean, quality data that’ll boost ad performance by targeting quality users. Make sure the partner you choose can demonstrate they can deliver these improvements.
• Always remember that any changes to partners might impact the ad formats you have access to and creative rendering, as these can affect performance.

Do you still have more questions about SPO? We’ve compiled a free guide that provides an overview of how SPO works in programmatic ad buying.