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Super-Auction for Every Mobile Impression: Dynamic Demand Explained

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Posted by Andrew Gilligan on June 30, 2015
Super-Auction for Every Impression: Smaato’s Dynamic Demand Explained

When we set out to rebuild our ad server, we wanted to try to build a more perfect selection process. As advertising budgets move to more programmatic buying, we felt the need to make that a primary way for ads to be delivered inside the ad server, while giving the publisher every control over the exchange like they would their own direct line items.

Much of this idea is what we describe as Dynamic Demand, which is essentially our way of allowing every demand source to compete for every ad request. In the early days of Ad Exchanges almost every company split their RTB and mediation layers. If the auction didn’t clear at a certain price, it was given to the Ad Networks. But this model was inefficient when dealing with ad networks that were not guaranteed to fill.

 

Dynamic Demand Logic

The diagram above describes a way of viewing eCPM, or TrueCPM. Most ad exchanges work in this way where a high bid is sometimes ignored in favor of an uncommitted ad network.

SSPs are very concerned with this “waterfall” scenario with ad networks as it increases the chance for latency induced discrepancy. It is often assumed you will lose 3% to 6% of your ad requests while traversing a chain like this, per network tried. This is due to the user navigating away from the page, timeouts, or just network errors.

Our goals with SPX:

  • Create competition between the three sales channels (Direct, Exchange, Networks)
  • Reduce the number of ad networks requested
  • Increase RTB Fill
  • Higher overall eCPM

 

Results:


Dynamic Demand eCPM Increase
 

On average we are seeing an ~82% increase in fill rates and a 68% increase in CPMs. These fluctuate based on the given publisher, but overall we think this was a much better way to run an ad selection process.

Powerful Controls:

We’ve given publishers the ability to control how the ad exchange can compete with their ad serving stack. You can run it as traditional “remnant” fill or make it compete with your direct sold campaigns. Giving control back to publishers allows for greater transparency in how and at what prices the ad exchange is able to pick up your inventory. In the future this framework will open up for even more functionality in the programmatic marketplace.

Written by Andrew Gilligan

Smaato's Senior Director, Product Strategy Andrew Gilligan brings more than 10 years of advertising technology experience to Smaato's product strategy team. He has extensive knowledge in desktop and mobile ad serving as well as deep expertise in yield optimization and the SSP space.

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