Making Every Advertising Euro Count in Programmatic Advertising: My Approach to Supply Path Optimization (SPO) in Display & Video 360

 

When I manage programmatic advertising investment, I don't only ask whether campaigns are pacing, whether the cost per thousand impressions is competitive, or whether the cost per acquisition and return on advertising spend are on target.

I also want to know:

How efficiently are my advertising euros reaching the inventory I actually want to buy?

That becomes particularly important when buying across Germany and wider Europe, where Display & Video 360 can provide access to publisher inventory through multiple exchanges and supply-side platforms. The same or substantially overlapping inventory can sometimes be available through different authorized routes, each with its own economics, auction dynamics, transparency, inventory access and performance characteristics.

For me, that is where Supply Path Optimization (SPO) becomes commercially important.

The objective isn't to create the shortest possible supply chain. It is to decide which paths deserve my advertising euros, what value each path adds, and where reallocating spend could make the overall media investment more productive without unnecessarily sacrificing scale.

Start With the Advertising Euro, Not the Supply-Side Platform

Consider an illustrative campaign where I am managing €500,000 in programmatic advertising spend through Display & Video 360 across Germany and selected European markets.

The campaign buys open-web display and video inventory. Depending on the publishers and inventory involved, Display & Video 360 can transact through different exchanges and supply-side platforms.

A simplified view of the buying environment could include:

Supply route	What I need to understand
Display & Video 360 → Google Ad Manager → Publisher	What inventory am I accessing, at what economics and quality?
Display & Video 360 → Magnite → Publisher	Is this access incremental or substantially overlapping with another route?
Display & Video 360 → PubMatic → Publisher	What unique inventory, deal access or performance does this relationship contribute?
Display & Video 360 → Index Exchange → Publisher	How does the path compare on economics, quality and incremental access?
Display & Video 360 → Equativ → Publisher	Does the route provide additional European supply or campaign value?
Display & Video 360 → Supply partner → Authorized reseller → Publisher	What is the reseller adding, and is that additional layer justified?

 

I would not assume that every publisher is available through every one of these routes. The actual relationship needs to be established from the publisher's authorized seller declarations and the supply-chain information associated with the inventory.

That distinction matters.

Supply Path Optimization (SPO) isn't about deciding that Magnite is better than PubMatic, or that Index Exchange is better than Equativ.

It is about understanding what each route contributes for the inventory I am actually buying.

The Real Problem: Multiple Paths Can Lead to Similar Inventory

Imagine a German publisher makes inventory available through several authorized selling relationships.

For a particular impression opportunity, my buying environment might contain a relatively direct route:

German Publisher → Magnite → Display & Video 360

while other inventory could arrive through a reseller relationship:

German Publisher → Authorized Seller → Reseller → Display & Video 360

The reseller route is not automatically bad.

The direct route is not automatically better.

What matters is whether the additional path gives me something worth paying for.

That could be unique inventory, additional scale, private marketplace access, a useful identity capability, a particular format, geographic strength, curation or stronger performance.

If it gives me none of those things and substantially duplicates inventory already available through another route, then I have a reason to investigate whether that path deserves the same level of spend.

This is the fundamental Supply Path Optimization (SPO) question for me:

What incremental value am I receiving for every additional route through which I buy the inventory?

How I Would Analyse the Supply

I don't want to optimize against one metric. A lower cost per thousand impressions can be attractive while hiding weaker inventory quality or worse downstream performance.

I would evaluate the material supply paths across six dimensions:

Dimension	What I want to know	Why it matters
Economics	What am I paying to buy through this route?	Identifies whether additional cost is producing additional value
Directness	Who sits between the publisher and my buying platform?	Helps expose unnecessary or unexplained intermediation
Incrementality	What inventory or reach disappears if I reduce this path?	Prevents Supply Path Optimization (SPO) from accidentally destroying scale
Quality	How do viewability, invalid traffic and other relevant quality signals compare?	Prevents cheap inventory from being mistaken for efficient inventory
Performance	What happens to conversion rate, cost per acquisition, return on advertising spend or the campaign's actual objective?	Connects supply decisions to advertiser value
Transparency	Can I establish who is authorized and who participated in the transaction?	Gives me confidence about what I am actually buying

The combination matters more than any individual metric.

Following the Actual Supply Path

Display & Video 360 reporting can tell me a great deal about where spend and performance are occurring, but Supply Path Optimization (SPO) also requires understanding the supply chain underneath the buying interface.

Three transparency mechanisms become particularly useful together.

Mechanism	The question I use it to answer
Authorized Digital Sellers, or ads.txt / app-ads.txt	Who has the publisher authorized to sell this inventory?
sellers.json	Which business entity sits behind the seller identifier, and is it operating as a publisher or intermediary?
Open Real-Time Bidding SupplyChain object	Which sellers or resellers participated in the path for this bid request?

I don't treat these as three disconnected technical standards.

I use them as a sequence:

Authorization → Seller identity → Transaction path

The publisher's Authorized Digital Sellers declaration can tell me that a particular advertising system and seller account is authorized and whether that declared relationship is DIRECT or RESELLER.

The sellers.json information can help identify the business entity represented by the seller account.

The Open Real-Time Bidding SupplyChain object can then expose the sequence of selling entities involved in a bid request.

Together, they give me a much better picture of how an impression opportunity reached Display & Video 360.

DIRECT Is a Signal, Not My Buying Strategy

One mistake I would avoid is turning Supply Path Optimization (SPO) into:

DIRECT = good

RESELLER = bad

That is too simplistic.

A legitimate reseller can add meaningful value. Publishers can also use monetization partners and sales houses as part of legitimate commercial structures.

My decision therefore isn't based purely on the label.

I want to know:

What is this path adding?

If an authorized reseller provides access I cannot otherwise obtain, valuable deals, incremental reach or better performance, there may be a strong reason to retain it.

If another reseller route adds cost and complexity while providing almost entirely overlapping inventory with no meaningful improvement in quality or performance, that is a different conversation.

The same applies to path length.

Shortest ≠ automatically best.

Putting €500,000 Behind the Analysis

This is where Supply Path Optimization (SPO) becomes more interesting than an advertising technology exercise.

Consider this purely illustrative analysis of our €500,000 European campaign:

	Path A	Path B	Path C	Path D
Spend	€150K	€110K	€80K	€60K
Cost per thousand impressions	€4.70	€4.10	€3.80	€3.55
Publisher overlap	Medium	Medium	High	High
Incremental access	High	High	Medium	Low
Viewability	76%	74%	69%	64%
Cost per acquisition	€39	€42	€48	€54
Supply depth	Low	Low	Medium	Higher
Initial action	Prioritize	Maintain	Test	Investigate / Reduce

These numbers are illustrative, but the decision logic is what matters.

Path D has the lowest cost per thousand impressions.

If I optimize purely for cheap inventory, it looks excellent.

But now I know that it also has high publisher overlap, little incremental access, weaker viewability, more supply-chain depth and a higher cost per acquisition.

The cheapest impression has become the least attractive advertising euro in the comparison.

Meanwhile, Path A has the highest cost per thousand impressions but provides high incremental access, stronger quality and the lowest cost per acquisition.

That is why I don't use cost per thousand impressions as a proxy for Supply Path Optimization (SPO).

What Happens Before I Reduce a Path?

I would not look at the table above and immediately block Path D.

First I want to understand what disappears when I reduce it.

That means testing.

For example, I could reduce exposure through that route and compare the resulting media mix against a meaningful baseline.

I would monitor:

Spend • Reach • Frequency • Cost per thousand impressions • Win rate • Viewability • Invalid traffic • Conversions • Cost per acquisition • Return on advertising spend • Revenue

If the reduction removes duplicated or low-value opportunities while stronger supply absorbs the investment without damaging valuable reach or performance, I have evidence supporting further reallocation.

If reach collapses in an important publisher segment or performance deteriorates, the path was adding something my initial analysis did not fully capture.

Supply Path Optimization (SPO) should therefore be measured and tested, not performed with a blunt blocklist.

Now the Advertising Euros Become Interesting

Suppose the analysis and testing show that €20,000 currently allocated through less productive supply can be moved without materially damaging valuable reach.

I don't consider the job finished because I “saved €20,000.”

The original media budget was:

€500,000

After Supply Path Optimization (SPO):

€500,000

The question becomes:

Where can that €20,000 generate more value?

I might reallocate it toward:

→ Supply paths demonstrating stronger quality and performance
→ Publisher inventory with additional scaling headroom
→ Private marketplace opportunities
→ Higher-value audiences
→ Another European market with efficient growth potential
→ Incremental reach that the existing mix is not capturing

Now Supply Path Optimization (SPO) has moved beyond supply-chain housekeeping.

It has changed how productively the €500,000 is being invested.

Why I Don't Consolidate Everything Into One Supply-Side Platform

A beautifully simple supply chain can still be a bad media plan.

If I aggressively consolidate supply simply because several supply-side platforms overlap, I could lose:

unique inventory, incremental reach, publisher relationships, private marketplace deals, geographic coverage, identity capabilities, useful auction access or performance.

That is why I think of Supply Path Optimization (SPO) as allocation, not elimination.

My decisions can therefore be more nuanced:

Decision	When I would consider it
Prioritize	Strong economics, quality, performance and/or genuinely incremental access
Maintain	Path continues to contribute meaningful value
Test	Value is unclear and I need evidence before reallocating
Reduce	Significant overlap with limited incremental contribution
Exclude	Path fails the required authorization, quality, transparency or value criteria

 

Not every Supply Path Optimization (SPO) decision needs to end with a blocked exchange.

Sometimes the best decision is simply:

Spend less here and more there.

My Supply Path Optimization (SPO) Framework

Ultimately, every material supply route needs to earn its place in the media plan.

Question	What I am establishing
Is it authorized?	Can this entity legitimately sell the inventory?
Who is in the path?	Do I understand the sellers and intermediaries involved?
What does it uniquely provide?	Inventory, reach, deals, capabilities or other incremental value
What is the media quality?	Am I buying valuable exposure rather than merely cheap impressions?
What are the economics?	What does accessing that value actually cost?
What does it contribute to performance?	Does the route support the campaign and business objective?
What happens if I reduce it?	Can I improve allocation without sacrificing valuable scale?

 

That final question prevents Supply Path Optimization (SPO) from becoming a cost-cutting exercise.

Making Every Advertising Euro Count

For me, Supply Path Optimization (SPO) isn't about finding the fewest supply-side platforms or blindly choosing the shortest route to a publisher.

It is about understanding how advertising euros move through the programmatic advertising supply chain and whether every material route is adding enough value to justify the investment flowing through it.

That requires looking beyond the Display & Video 360 interface into seller authorization, reseller relationships and the actual supply chain, then bringing that information back together with economics, inventory quality, incrementality and campaign performance.

And when I find a path that isn't earning its share of the budget, the objective isn't necessarily to spend less.

It is to put those euros somewhere they can work harder.

That is where Supply Path Optimization (SPO) becomes much more than supply-chain efficiency.

It becomes a way to make the existing programmatic advertising budget more productive and create more room to scale without simply asking for more money.