We ran an exercise on a modest programmatic campaign to establish where the money went between our account and a publisher's. It took several weeks and the cooperation of two vendors, and the answer was more layered than anybody had described to us.
The theoretical chain
As usually explained: advertiser to demand-side platform to exchange to supply-side platform to publisher. Four steps, each taking a fee.
That is the clean version and it is close to a best case.
What we actually found
Additional layers that nobody had mentioned and that are entirely normal.
Resellers, where one supply-side platform sells inventory it obtained from another rather than directly from the publisher. This can happen more than once.
Data providers, taking a fee per impression for audience segments, sometimes several on the same impression.
Verification and measurement vendors, each with a per-impression cost.
Identity and matching services.
And in some paths, additional intermediaries whose function was genuinely unclear to us and whose fee was nonetheless present.
On some paths we counted seven parties between the budget and the publisher. On the cleanest, three.
The take rate
The number everyone wants and nobody publishes consistently.
Industry studies over recent years have repeatedly found that a substantial share of advertiser spend does not reach the publisher, with estimates that vary by methodology and cluster in a range that most people in the industry find uncomfortable.
A significant portion of that has historically been unattributable — money that left the advertiser and arrived nowhere identifiable, which is the finding that generated most of the attention.
Our own exercise was smaller and less rigorous, and it pointed the same direction. The difference between our cost per thousand and what the publisher reported receiving was larger than the sum of the fees anybody had disclosed.
Why the paths multiply
Not conspiracy, mostly incentives.
Publishers connect to many supply-side platforms to maximise competition for their inventory, which is rational for them.
Those platforms connect to many exchanges. Exchanges connect to many demand-side platforms.
The result is that the same impression is available through many routes, each with different fees, and a buyer bidding without path controls will win some of them through expensive routes.
Resellers exist because they can. If a platform can obtain inventory from another and resell it, and buyers will bid on it, there is a margin.
What supply path optimisation actually does
The response the industry developed, and it is genuinely useful with limits.
The basic idea is to identify the shortest, cheapest route to a given publisher and to bid only through that, ignoring the duplicate paths.
Done properly this reduces cost per impression meaningfully, reduces the number of bid requests being processed, and reduces the environmental cost of all the redundant computation, which is a real and underdiscussed issue.
The limit is that it requires information buyers do not automatically have, and the parties who could provide it are not always motivated to.
The tools that do exist
Two that are worth using and are underused.
The seller declaration files that publishers host, declaring who is authorised to sell their inventory. These are public, machine readable, and checking them tells you whether the party selling you an impression is authorised to.
The corresponding files published by intermediaries, declaring their own sellers, which allows a chain to be traced in principle.
Compliance with these is now widespread and imperfect, and reading them is the cheapest available diligence.
The second is direct relationships. Buying directly from a publisher, or through a single agreed path, removes the entire question. It does not scale the way open exchange buying does, which is why it is not the default.
What we changed
We restricted our buying to a defined set of paths, chosen by working with our platform on which routes actually reached the publishers we wanted.
Our cost per thousand fell noticeably. Our reach fell too, which is the honest trade — some inventory is only reachable through longer paths.
We moved a share of budget to direct deals with the publishers that mattered most, which cost more per impression on paper and less in total once the intermediary layers were removed.
And we started asking every vendor what their fee is as a percentage, in writing. The variation in how readily that question was answered was itself informative.
The carbon question
An angle that has started to matter commercially as well as ethically.
Every duplicate bid request is computation, and the volume is enormous. Studies attempting to quantify the emissions of programmatic advertising have arrived at figures large enough that several major advertisers now treat supply path reduction as a sustainability measure as well as a cost one.
The useful thing about that framing is that it aligns with the commercial argument rather than competing with it. Fewer paths means lower cost and lower emissions simultaneously, which is an unusually clean case to make internally.
What to ask a vendor
Three questions that have proved productive. What is your fee as a percentage of media spend. Which paths do we currently buy through for our top twenty publishers. And can you provide a log-level export so we can trace it ourselves.
The willingness to answer the third is the most informative response of the three.