Supply Chain

Consider the logistics that go into enabling a consumer to purchase a pair of jeans at a popular department store. To end up on the rack it needs to be produced by the manufacturer, sent through distribution pipelines and then marked up for profit by retailers. A manufacturer will typically take the low-margin, high-volume approach to scale revenue quickly through distributors instead of going direct to consumer.

Digital publishers (eg: website, social network) sell "eyeballs" in the form of advertisements that can be purchased by any brand in the world. It isn't practical for a blog owner to hire a sales and marketing team to monetize every single page view throughout the year so they rely on third-parties (ie: distributors) with pre-existing connections to instead manage it on their behalf (for a fee of course). Likewise a brand isn't going to catalog and negotiate contracts with every single website, social influencer and content platform.

Programmatic

"Programmatic" (or simply, automated ad buying) has become the most common approach to delegate the heavy lifting of advertising and monetization. In 2022 over half of the $200B spent on internet advertising ran through intermediaries who take a cut of revenue like traditional supply chains in the physical world (also know as the "ad-tech tax"). Hundreds of companies sit between the supply (ad inventory) and demand (advertisers) selling services like data (target people who love jeans) and optimization (only show my ad if the user is likely to click on it).

Brands are beginning to question the value of these added costs and turn to platforms that can offer Supply Path Optimization (SPO) or more simply, reduce intermediary fees and get more value for marketing dollars. In an industry where revenue opportunities have driven platform fragmentation, a vertically integrated solution that can fulfill the needs of both sides of the market can eliminate costs and drive more revenue for all parties involved.