3 Auctions Rule Digital Advertising. Here's A Guide To ...

Three auction clearinghouses have come to dominate digital advertising: Prebid, Google open bidding (formerly known as exchange bidding) and ... ProgrammaticI/ONewYork// 2022AdExchangerAwards// NewsletterSign-up Login × LoginTopics News AdExplainer Advertisers Publishers Platforms Mobile Data Commerce TVandVideo Opinion Data-DrivenThinking TheSellSider OnTVandVideo ContentStudio ComicStrip BecomeAMember SignUp Events&Awards ProgrammaticI/ONewYork AdExchangerAwards AllEvents Podcasts AdExchangerTalks TheBigStory AboutUs Advertise AboutUs ContactUs ContributorGuidelines Twitter Facebook LinkedIn RSS AdExchanger.com Menu Topics News AdExplainer Advertisers Publishers Platforms Mobile Data Commerce TVandVideo Opinion Data-DrivenThinking TheSellSider OnTVandVideo ContentStudio ComicStrip AboutUs Advertise AboutUs ContactUs ContributorGuidelines Events ProgrammaticI/ONY Top50ProgrammaticPowerPlayers AdExchangerAwards AllEvents OtherEvents Podcasts AdExchangerTalks TheBigStory Membership MemberExclusives SignUp Search //phpif(isset($share_url)):?> Connect //phpendif;?> MustRead DigitalTVandVideo HowNielsenIsShiftingFromPanel-ToPerson-BasedTVMeasurement Publishers SupplyChainTransparencyIsKeyToSupplyPathOptimization TheSellSider DailymotionIsPuttingAllItsEggsIntoContextual TheBigStorypodcast TheBigStory:DataCleanRoomsAndMisleadingClaims Data (Clean)RoomForOneMore:OptableJoinsUnifiedID2.0 CloudAdvertisingData SnowflakeIsAggressivelyPushingIntoMarTechAndAdvertising BySarahSluis Wednesday,November20th,2019–3:02pm Share: Threeauctionclearinghouseshavecometodominatedigitaladvertising:Prebid,Googleopenbidding(formerlyknownasexchangebidding)andAmazonPublisherServices’TransparentAdMarketplace(TAM). Withtheriseofheaderbidding,publishersneededawaytohavemultipleexchangesbidagainsteachotherinrealtime.Prebidlaunchedin2015asanindependentandopensourceoption,Google’sopenbiddingdebutedinApril2016andAmazonintroducedTAMattheendof2016.Threeyearsin,eachhasbecomealeader.Manypublishersusetwoorthreeoftheseauctionclearinghouses. Butshouldbuyersandpublishersstarttoparedownwhotheyworkwith? Todate,mostbuyershaven’tbeenpickyaboutwhethertheybuyapublisher’sinventorythroughTAM,openbiddingorPrebid.Theyalsohaven’tbeenabletoascertainallofthenuancesbetweentheseenvironments,orevenwhichsetuptheywonabidthrough. Butthat’sabouttochange.TwoupcominglabelingstandardsfromtheIABTechLab(SupplyChainobjectandsellers.json)willmakeiteasierforbuyerstodetermineiftheyboughtanexchange’simpressionthroughPrebid,GoogleopenbiddingorAmazonPublisherServices’TAM. Andiftheywanted,buyerscoulddecidetoworkwiththefastestsolution,theonewiththelowesttollsorthemostdataandtransparency. Theadindustry’sincumbentleader,Google;itsoutsiderchallenger,Amazon;andtheindependentscrappyunderdog,Prebid;mayseeadoptionriseorfallasbuyersprunetheirpaths. Herearesevenfactorsthatbuyers,publishers,DSPsandexchangesshouldconsiderwhennavigatingbetweenthesethreedominantpathstoapublisher’sadinventory. One:fees  Eachofthethreeauctionsexactsataxforitsservices,andbuyerscareimmenselyaboutgettingthelowest-feepathtosupply. Googleopenbiddingchargesthehighestfee,a5%feefordisplayandoutstreaminventoryanda10%feeforvideoandapp.Thatchargeisontopoftheexchangefee.Soanexchangewouldtakeitscutfromthebuyer’sbid,thenGooglewouldtakeitsfee. AmazonPublisherServices’TAMchargesaone-centCPMonlyforimpressionsitmonetizes,butpublishersmusthaveadirectrelationshipwiththeirSSPtoaccessthatlowerfee.AmazonUnifiedAdMarketplace(UAM)runsonthesameinfrastructurebuthandlesbillingandreconciliationforsmallerpublishers.UAMchargesa10%feeforoutsidebuyers,makingitmoreexpensivethanopenbiddingfordisplayinventory. AmazonDSPcustomersgetabreak,anddon’tpayanyfeestouseTAMorUAM. Prebiddoesn’tchargefeesbecauseit’sanopen-sourcesolution.ButpublishersdopayapriceintermsofoperationalcomplexityandengineeringinvestmenttoconfigureandoptimizePrebid,notedTomKershaw,CTOofRubiconProjectandchairmanofPrebid.org. SosomepublisherspayanexchangetomanagePrebid.RubiconProjectexactsatollforeachimpressionthatflowsthroughDemandManager,itsmanagedwrapperthatsitsontopofPrebid.AppNexusoperatesasimilarsolution,PrebidEnterprise. Theotherkeydetailaboutfeesishowexchangessubmitbidstoeachoftheseauctions.Buyersandpublishersusuallypreferforbidstobesubmittedonanetbasis–orafterallthefeeshavebeentakenout.Ifabuyersubmitsanidenticalbidtotwoormoreauctionaggregators,thebidfromtheexchangethattakesthelowestfeeswouldwin,allelsebeingequal. TAMandGoogleopenbiddingalwaysoperateona“netbid”basis.Prebidismostoftenconfiguredonanetbasis,butthechoiceisultimatelyleftuptothepublisher. Two:speed Nexttofees,speediswhatpublishersandbuyerscareaboutmostinchoosinganauctionclearinghouse.Eachauctionhousevariesinhowfastitcantransactandrenderanad.Auctionsin offsiteserversrunfasterthanauctionsthatrunclientside,forinstance,inamobilewebbrowser. BecauseopenbiddingrunswithinGoogleAdManager,it’scompletelyserverside.Openbiddingaddsonly60millisecondstoGoogleAdManager’sstart-to-finishprocess,foratotalof150millisecondsto300millisecondstorunanauction,accordingtoGoogle. TAMinitiatesontheclientside,buttheauctionrunsserverside.Akeybenefitisthatperformanceisn’taffectedbyhowmanypartnersapublisheradds,Amazonsaid. TAMoftenrendersanadonpagefasterthanGoogleopenbidding,accordingtopublisheryieldconsultantTonyPatel.DuringthemonthofOctoberonasitehemanages,TAMloaded86%ofadswithin500milliseconds,and93%byonesecond.Incontrast,69%ofadsfilledbyGoogleopenbiddingloadedwithin500milliseconds,and77%ofalladsloadedwithinonesecond. Bothoftheseserver-sideauctionsrunfast.Incontrast,Prebidperformancecansufferwhenpublishersaddtoomanypartnersbecausetheirrequestsgetbottleneckedbythebrowser.Browserscanonlysendasetnumberofrequestsatatime,soapublisherthatputs20partnersinviaPrebidmightseethemprocessedsixatatime,forexample. There’sanotheraspecttospeedaswell–howeasyitistosetupanextraauction–andhere,TAMandopenbiddingalsohaveanadvantage. Server-sidesolutionslikeAmazonPublisherServices’TAMandGoogleopenbiddingareeasytouseandcanbesetupquickly. Buttheydon’tofferasmuchcustomizationorgranularityasopensourcePrebid,akeydrawforpublishers. Prebidletspublisherstunetimeouts,orhowlongtheywaitforaresponsebeforetheyshowanad.Theseoptionsletpublishersbalanceexperienceandrevenue,decidingexactlyhowlong(500milliseconds?Onesecond?)theycanwaitforbidresponsesbeforetheirreaderswillgetimpatientoraslow-loadingadimpactsviewability.TAMalsoallowspublisherstocontroltimeouts. Three:floordata Buyerswanttowinauctions,andtheyneeddatatosupportthatquest. PrebidandTAMdon’tusefloors,sobuyersmaybidbelowthefloorwithoutknowing.Inlieuoffloors,Amazonallowspublisherstoconfigurepriceincrementsbyadplacementandslot.AndPrebidplanstoaddfloorsinQ4. BecauseGoogleopenbiddingsitswithinthepublisher’sadserver,auctionparticipantsgetthemostinformationtoguidetheirbidding. Intheopen-biddingbidrequest,exchangeswillseeafloorcreatedfromapublisher’spre-configuredfloorforagivenadplacement(suchasabanneroravideounit)aswellasdirect-soldcampaigns.Soa$20CPMbidforadirect-soldcampaignthat’sbehindonitsdeliverygoalsmaygetpassedintoopenbiddingasa$50CPMfloortoensurethecampaigndeliversontime,Googlesaid. TAMandPrebidcan’taccessthisdataduringtheirheaderauctions. However,whenGooglemadeitschangestounifiedpricingandswitchedtoafirst-priceauctionthisfall,itremovedonedistinctadvantageinopenbidding,knownas“lastlook.”Untilacoupleofmonthsago,openbiddingusedtheresultsofthePrebidandTAMauctionsasthe“pricetobeat”foralltheopen-biddingbuyers.Thatextrainformationmeantthatopen-biddingbuyerscouldoutbidPrebidandTAMwinningbids. “Informationispowerinourindustry,”Kershawsaid.“TheabsenceofbiddatawasahugedisadvantageforPrebidandthisisbeingcorrected.” Four:datatransparencyandextradata Prebid,openbiddingandTAMeachgivepublishersandbuyersaccesstodifferenthistoricaldataaboutperformance.Forpublishersinparticular,thisdataaccesscanopenup–orlimit–howtheytuneeachauction. Prebidoffersthemostgranularinformation.Publishersgetconsistentaccesstolog-leveldata. TAMofferssamplesofauctionlogstopublisherssotheycanverifythatAmazonisrunningafirst-priceauction–butnotfulllogs,whichcouldleadtodatamining.Buyersreceiveaggregatedperformanceinformationabouthowtheycomparetotheirpeers. TAMalsoofferspublishers“shoppinginsights,”anadd-onthathelpspublishersfigureoutitsreaders’shoppinginterestsonAmazon.Inaddition,ifabuyerwantstoreachaudiencesthatindexhighincertainproductcategories,theycansetupaprivatemarketplaceusingTAMandtheAmazonDSPtoaccessthatuniqueAmazondata. Openbidding,withinGoogleAdManager,doesn’tallowpublisherscompletelog-leveldataaccess.Publishersthatusedtojointheiropen-biddingdatawiththeirPrebiddatainordertogetacompleteviewoftheirinventorycannolongerdoso,becauseGooglenolongerallows“BidDataTransfer”filestobejoined,citingprivacyconcernsarounduser-leveldata. “Withopenbidding,wearelargelydependentonapre-fixednumberofkeyvaluepairsinordertoeffectivelycapturelog-leveldetailsandmakedecisions,”saidNicoleLesko,SVPofdata,adplatformsandmonetizationatMeredith. Withinopenbidding,buyerswithlosingbidsnowalsogetinformationabouthighestprice,orminimumbidtowin,andthatextrainformationallowsthemtobettertunetheirbids. Five:uniqueexchangepaths Googleopenbidding,AmazonPublisherServices’TAMandPrebidofferbuyersaccesstoanoverlappingbutnotcompletelyduplicativesetofinventory. AppNexusandTrustX,forexample,areamongtheexchangesthatdon’tparticipateinGoogleopenbidding.TrustXwantsthemostdirect,low-feepathtosupplysoitdoesn’twanttoworkwithapartnerthataddsafee,accordingtoCEODavidKohl.AndAppNexushistoricallytakesstronganti-Googlepositions. AndsomeexchangestoldAdExchangertheywantedtointegratewithTAMbutwererejectedbyAmazonbecausetheywereviewedascompetition. TheGoogleexchangeformerlyknownasAdXdoesn’tparticipateinPrebidorTAM,leavingagapwhichpreventspublishersfromshiftingtheirentireauctiontotheheader. Fromabuyer’spointofview,thisdecisioncutsdownonthenumberofduplicateimpressionstheysee.Whenexchangesintegrateeverywhere,buyerscanendupbiddinginthreeseparateauctionswheremultipleexchangessellthesameadimpression.DSPswanttoavoidduplicativepathstothesameimpressionbecauseitdrivesupcosts. Thusfar,publishersareincentivizedtodotheopposite,becausetheyseeanincreaseinrevenueastheystackupmoresupplysources. Six:addinganintermediary Buyerswanttobuythroughdirectpaths,butnotalloftheseauctionclearinghousesareconsidereddirectpathstoapublisher’sinventory. Beingclassifiedasanintermediaryisablackmarkinaworldwheremanybuyerswanttocutoutallindirectrelationships–onereasonthatthestandardbecameasourceofcontentionbetweenGoogleandTheTradeDeskearlierthisyear. GoogleopenbiddingandUAMhandlepaymentandreconciliationforpublishers,classifyingthemasfinancialintermediariesaccordingtothenewIABTechLabtransparencyspecs. “Exchangespaythem,theytaketheircutandthenpaypublishers.That’safinancialintermediary,”saidSamTingleff,CTOoftheIABTechLab. Incontrast,PrebidandTAMareconsidereddirect,“non-financialintermediary”pathstosupply,becausetheydon’thandlepayment. Ifbuyersonlychoosenon-intermediarypaths,theymaybuylessthroughGoogleopenbiddingandAmazon’sUAMinfavorofPrebidandTAM. Seven:matchrates Eachofthesethreesetupsvariesintermsofmatchrate. InPrebid,exchangesputtheircodeonthepublisher’spage.Matchratesarehigh. Server-sideconnectionsrequireanextramatchforeveryonebutthe“host”exchangethatretainsatagonthepage–suchasGoogleforopenbiddingorAmazonforTAM.Allotherexchangeswithinthatauctionwillexperiencealowermatchratebecauseofthatmatching“hop.” Mileagemayvary.ExchangesuseavarietyoftechnicalapproachestopropthosematchratesbackuptowheretheywouldbewithaPrebidconnection.“Theseareallat-scaleplatformsthatarehighlyincentivizedtooptimizetheirmatchrates,”Tingleffsaid. Oneexchangesharedthatitsees50%lowermatchratesonGoogleopenbiddingcomparedtoPrebid.ButanotherexchangeworkinginPrebidandopenbiddingitseesvirtuallyidenticalmatchratesbetweenthetwo.Googlesharedthatoneofitspartners,RhythmOne,sees80%matchratesinopenbidding. Sevenfactors  Todate,publishershavedonethemosttestingbetweenTAM,openbidding,Prebidandahostofotherheader-biddingwrappersonthemarket.Mosthaveconcludedthatmoreoptionsarebetter–aslongastheydon’toverloadtheirclient-sideauctionwithtoomanyexchangesortoolongofatimeout. Exchanges,too,findtheyintegratemoretightlywithsometechthanothers.Anexchangewithalightning-quickserver-sideresponseandastrongmatchratewithGoogle mightoutperformitspeersandgainmarketshare,whileanexchangethatcanreturnbidsfastesttoTAMmightbenefitthere. Buyerswillbethenextgrouptochoosethepathsthatworkforthem.Publishersarefieldingmorequestionsfrombuyerswhowanttoknowthepathwiththelowest“tax”orthefewestbugs.Buyersalsowanttoknowiftheygainatechnicaladvantagebybuyingvideoinventoryfromonepathorsettingupaprivatemarketplaceinanother. AndDSPsandbuyersarepushingforexchangestoquicklyadoptsellers.jsonandSupplyChainobject,whichwillgivethemcontroltoseeiftheyshouldbuythroughalloftheseauctionaggregators,orparethemdowntojustahandful. Whenbuyersstarttomakechoicesaboutwheretobuytheirads,theindustrycouldseeAmazonPublisherServices’TAM,GoogleopenbiddingorPrebidprevail,ormarketshareshiftbetweenthethreeauctionclearinghouses. Enjoyingthiscontent? SignuptobeanAdExchangerMembertodayandgetunlimitedaccesstoarticleslikethis,plusproprietarydataandresearch,conferencediscounts,on-demandaccesstoeventcontent,andmore! JoinToday!     PopularTodayAdvertiserCanEngineOilBeSexy?BPCastrolBlendsLong-FormVideoWithAnInfluencerToFindOutCloudAdvertisingDataSnowflakeIsAggressivelyPushingIntoMarTechAndAdvertisingAdExchangercontentstudioWhyMarketersNeedMoreThanADSPToMeetToday’sDigitalAdvertisingNeedsDigitalTVandVideoHowNielsenIsShiftingFromPanel-ToPerson-BasedTVMeasurementTheBigStorypodcastTheBigStory:DataCleanRoomsAndMisleadingClaims PrivacyPolicy// Subscribe// Advertise// ContactUs// DiversityInclusion&Equity ©2022AccessIntelligence,LLC-AllRightsReserved