The Ad Tech Myths Series Ep#1: High-revenue bidders are not always your best bidders!

Posted by Pubstackadmin on

Today, as a publisher you may work with 5 to 20 different SSP’s (bidders) that are connected to your inventory through client side header bidding and server side header bidding setup (Amazon TAM, EBDA, Prebid SZS).

Which means that:

  • Prior to one effective impression, 20 bid responses may occur,
  • You have more and more partners and it’s hard to understand what unique value they bring to your ad stack (on what location? what size? what specific setup? etc.).

Let’s take a simple example where 4 SSPs are consulted on an auction leading to an impression:

Consulted SSPs during the Auction

Consulted SSPs during the auction Bid (CPM)
SSP1: Rubicon 4$ (Winner!)
SSP2: Appnexus 3$
SSP3: Index Exchange 1$
SSP4: Smart Adserver no bid response

 

In this case the winner is Rubicon with a 4$ bid. In a first price Auction, Rubicon pays 4$ to the publisher. However, if Rubicon wasn’t taking part in the auction, Appnexus would have won the auction with its 3$ bid.

So, in the end, Rubicon generates 4$ in revenue, but if Rubicon wasn’t there, Appnexus would have made 3$ in revenue.

The unique value of Rubicon in this case is 1$.

If we sum up the auction process:

  • Rubicon is the winner and generated 4$ in revenue,
  • The unique value of Rubicon is only 1$ (which corresponds to the increment generated vs. the second highest bid: Appnexus),
  • The unaffected value of Rubicon is 3$ (which corresponds to the revenue that would have been made anyway if Rubicon wasn’t there).

Of course, we could generalize this to all auctions and all bidders. So, if Rubicon is generating 100,000€ in revenue per month, you can split it in 60,000€ of unaffected value (the money that would have been made in any case without Rubicon) and 40,000€ of Unique Value (the sum of increments that Rubicon brings to every auctions).

You should also monitor that split by country, device, location, format, etc.

Most publishers only track and monitor revenue that is made by their bidders (which is important of course), but in an open programmatic market where all SSPs are connected to the same buyers, it’s almost as crucial to monitor the Unique Value vs. the Unaffected Value.

Here are 3 tips that can really make a difference:

  • Improve your setup with every bidder in your stack, by understanding where they really over-perform competition and where they don’t.
  • Keep alive bidders that generate a low overall revenue but with a high unique value.
  • Disconnect bidders that generate low revenue, low unique value and slow down your pages.

 

Pubstack can help with those optimisations. Feel free to get in touch to discuss this topic!

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