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What is Demand-Path Optimization (DPO) and how does it contrast with Supply-Path Optimization (SPO)

When it comes to ad tech, people often confuse DPO with SPO and it’s easy to understand why. Many app developers and publishers looking to improve their share of ad spend start by searching for SPO, because it has been the most common term and there is a lot of misleading information published on the topic. As we interacted with our app developers, we realized that what they really want is DPO.

SPO has been around several years for demand partners and advertisers, but Demand-Path Optimization (DPO) offers needed advantages for app developers. And while they may sound alike or very similar, they are, in fact, two completely opposite approaches to the problem of maximizing ad revenue.

A recent study by PricewaterhouseCoopers revealed that only 51% of the ad spend gets to the app developers for their content.

Whereas SPO attempts to mostly streamline how Demand Side Platforms (DSPs) interact with Exchanges and Supply Side Platforms (SSPs), Demand-Path Optimization analyzes how impressions are bought rather than sold, for your benefit (more revenues to the app developer).  If you really want to capture more of the ad spend, you need to have a successful DPO strategy.

Previously, app developers have been able to do some actual DPO, via Prebid and PMPs (Primary Market Places). Prebid is a one-size-fits-all model and is outdated. It served the initial purposes to increase app developer revenues and move you closer to some advertisers, but the model is very inefficient and not beneficial to all. PMPs continue to be a great service, but efficiencies can be improved as well.  Today’s DPO is much more than revamped Prebid and PMPs.

How Can a Successful DPO Strategy Benefit App Developers?

A successful DPO strategy can move 10% to 25% more of the ad spend to the app developer.

DPO app developers benefit from:

1. Finding the most direct and efficient path to advertisers;
2. Lowering or eliminating known and hidden costs;
3. Increasing revenues; and
4. Increasing value of inventory to advertisers.

How Does the DPO Strategy Achieve These Efficiencies?

While we could go into more detail about this, here are the highlights of how app developers achieve greater efficiencies by using the VRTCAL DPO Platform:

1. Reduce Latency, through faster connection types and ad stack & mediation compaction;
2. Replace costly SDK/mediation partner connections with Direct Connections;
3. Integrate Directly with Demand-Side Platforms (DSPs);
4. Utilize Auction Groups, to better tailor the Prebid model for you; and
5. Enable Demand Targeting, to increase inventory value.

The VRTCAL SaaS Services have been engineered to execute your Demand-Path Optimization (DPO) strategy successfully.

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