It gives media buyers the ability to bid on and win inventory at the most reasonable price, while it lets publishers maximize their revenue over the long run. it aims to use algorithms or manual processes to eliminate ad inventory duplications and reduce overall DSP and SSP costs.
It is essentially an algorithm used by demand-side platforms to streamline how they interact with supply-side platforms. Each DSP has developed its own strategy for supply-path optimization: Some use it to pick up the bids that are most relevant and have the highest chance of winning, while others use it to turn off SSPs that are not implementing second-price auctions. It is important for DSPs for two major reasons: Bid duplication and various auction mechanisms used by SSPs. Header bidding puts a strain on DSPs, which are processing many more impressions per second than they used to. And the industry needs more transparency of pricing and auction dynamics.« Back to Glossary Index