Tales from the "Walled-Garden Escapee", Vol. 1 - Supply Path Optimization, Same-Same but Different

After spending the last five years deep in the walled garden world of digital advertising at Amazon Ads, I've recently stepped back into the broader advertising landscape and the media supply chain ecosystem feels like déjà vu. While there’s been plenty of chatter about disruption, transparency, and innovation, much of the same fundamental challenges still exist. Here’s what I’ve noticed as I get re-exposed to this side of the industry.

Key Trends and Learnings (or Lack Thereof)

1. The Same Conversations About Data, Just a Different Spin

   The phaseout of third-party cookies has been a hot topic for years, yet the industry is still scrambling for viable solutions. Google has delayed cookie deprecation multiple times, and while alternatives like Privacy Sandbox and Unified ID 2.0 have emerged, adoption remains fragmented. First-party data is the supposed silver bullet, but only 33% of marketers feel fully prepared to leverage it effectively, according to a 2023 IAB report.  

   
   

2. Regulations Keep Shifting, But Compliance is Still a Headache

   GDPR, CCPA, and newer privacy laws like China’s Personal Information Privacy Law (PIPL) have forced some changes, but navigating compliance still feels like a moving target. Transparency is the name of the game, yet 65% of advertisers still struggle with data governance, according to a Forrester study. Apple’s App Tracking Transparency (ATT) framework has also shaken up mobile advertising, with Meta estimating a $10 billion revenue impact in 2022 alone. I can’t wait to learn of the newest regulation requirement and acronym. 

   
   

3. Supply Path Optimization (SPO) is Still a Thing

   Five years ago, advertisers were looking for ways to trim inefficiencies in the supply chain, and not much has changed. A 2023 ANA report found that nearly 15% of ad spend is still lost in murky supply chains. SPO is still about cutting out unnecessary middlemen, reducing fees, and improving transparency. The difference now is that brands and agencies have more tools like programmatic direct and curated marketplaces to analyze and streamline their media buying.

   
   

4. AI and Automation Are Promising, But We’ve Heard That Before

   Machine learning is optimizing programmatic ad buys in real time, improving bidding strategies, and reducing waste. Google’s Performance Max and Meta’s Advantage+ are AI-driven ad solutions promising better results with less manual input. But let’s be honest—automation has been part of the conversation for years. While AI-driven creative testing and predictive analytics are making progress, inefficiencies in targeting and campaign management still exist.

   
   

5. Retail Media Networks Are the New Walled Gardens

   If you thought escaping one walled garden meant freedom, think again. Retail media networks (RMNs) from Amazon, Walmart, and Target are the new powerhouses, controlling valuable first-party data and forcing brands to play by their rules. Amazon’s ad business alone pulled in $38 billion in 2023, surpassing YouTube’s ad revenue. With retailers now acting as ad platforms, advertisers must navigate yet another set of closed ecosystems with limited data portability.

   
   

The Same Old Challenges

1. Fragmentation is Still a MessThe digital ad ecosystem remains a tangled web of platforms, exchanges, and policies. A 2023 eMarketer report found that the average advertiser now works with more than seven ad tech vendors, leading to inefficiencies and data silos. Unifying strategies across Google, Meta, Amazon, and the open web without losing efficiency remains a key challenge.

   
   

2. Ad Fraud and Brand Safety Are Still ProblemsFraudsters haven’t gone anywhere, and advertisers still have to stay vigilant. The ANA estimated that global ad fraud will cost advertisers $84 billion by 2023. Brand safety tools have improved, but the arms race against bad actors continues, especially with the rise of AI-generated deepfake ads and fraudulent bot traffic.

   
   

3. Attribution is Still Murky in a Post-Cookie WorldMeasurement and attribution haven’t gotten any easier. Apple’s ATT and Google’s pending cookie deprecation have forced marketers to adopt multi-touch attribution (MTA) and media mix modeling (MMM). Yet, a 2022 Nielsen report found that 54% of marketers still struggle with cross-channel measurement, making it harder to prove ROI.

   
   

4. Rising Costs, Less EfficiencyMedia costs have gone up, targeting has gotten trickier, and efficiency remains a struggle. The cost per thousand impressions (CPM) on social platforms rose by 40% from 2021 to 2023, per Adweek. Meanwhile, with reduced tracking capabilities, ad spend efficiency has declined, forcing advertisers to rethink their budget allocations.

   
   

Final Thoughts

After five years in the walled garden world, it’s clear that digital advertising’s supply chain hasn’t changed as much as people like to claim. It certainly isn’t displaying signs of the AI world taking shape and resolving all these problems, which is surely upon us but we are still far from that day. The buzzwords may evolve, and new players may emerge, but the core issues—efficiency, transparency, and measurement—are still the same. If you’re in this space, the game continues to be playing smarter, not expecting the system to fix itself, optimization, optimization, optimization!