In the intricate world of digital advertising, inefficiency is more than just an operational hiccup; it’s a systemic problem that siphons revenue, erodes trust, and stifles innovation. While headlines tend to obsess over data privacy or the death of cookies, there’s a quieter, more persistent issue haunting the ad tech supply chain: waste.

The Circular Trading Conundrum

Circular trading is a symptom of an over-engineered supply path. It occurs when inventory is passed between SSPs and resold among intermediaries before reaching a demand partner—often ending up where it started. Every additional hop in this chain introduces latency, cost, and complexity. In extreme cases, it even leads to bid duplication, which artificially inflates the volume of available impressions without offering new value. The result? More confusion, less transparency, and fewer wins.

The Supply-Demand Disconnect

Ad tech efficiency breaks down when sellers package inventory in ways that don’t align with buyer needs. Imagine a global campaign set to run only in Western Europe targeting a specific device, ad size and other basic parameters. While each individual targeting component may seem straightforward, the eventual complexity could render the seller’s unfiltered traffic largely irrelevant. This results in the buyer not only wasting time finding relevant traffic but also leads to unnecessary processing costs. This mismatch leads to missed opportunities, diminished performance and overall inefficient trading.

The Cost of Excessive Intermediation

With every middleman adding their own margin, the original value of the impression diminishes. Over-intermediation increases the take rate and distorts the economics of what should be a direct and transparent transaction. The problem isn’t just about money—it’s about trust. If advertisers and publishers can’t see who’s touching the inventory and why, they’re less likely to commit to long-term relationships.

Rethinking Efficiency

Ad tech companies need to audit their supply chains regularly, not just for fraud but for operational redundancy. The era of simply flooding the market with supply and expecting it to sell itself is long behind us. Without streamlining processes, your demand side will outmanoeuver and ultimately replace you. 

Efficiency means stripping away what doesn’t serve performance, transparency, or sustainability. It means aligning with demand, simplifying integrations, and removing layers that don’t deliver additive value.

In the next post, we’ll explore how this complexity can be overcome through a smarter approach to transparency, trading intelligence, and partner relationships.