In the first two articles of the series, we’ve taken a look at how brands can take a proactive approach in their supply path optimization with auction dynamics. In this article, we’ll provide some helpful guidance for assessing the value each ad partner is bringing to auction dynamics.
Powerful indicators of value include dynamic auction support and reporting capabilities. First-price auctions (FPAs) are relatively new concepts within the video advertising landscape, and the industry is still playing catch-up as a result. It’s important for brands to evaluate how each ad partner competes in FPAs or the roadmap each has in place to support such auctions.
Let’s take a look at some important questions that brands can ask both a demand-side platforms (DSPs) and a supply-side platforms (SSPs) to gauge their value in helping with auction performance.
Auction dynamics and DSP solutions
DSPs can help brands take the first step toward optimizing their dynamic auction performance. Below are a few questions that brands should consider when evaluating their DSP solutions:
Does the DSP support FPAs for video?
The ORTB Spec enables supply partners to pass information about auction type to DSPs for every bid request. Make sure that the DSP supports this technical capability and can ingest “at”:1 in bid requests.
Does the DSP listen to auction type signals?
It’s important that a DSP continually listens to these different auction type signals and adjusts its bidding behavior accordingly. Just because a DSP is ingesting the different auction types doesn’t mean it is actually responding to them. Make sure the DSP partner supports FPAs in video at both the technical and philosophical levels.
What is the DSP’s current level of auction reporting?
Being able to break out reporting and performance data by auction type is key to a brand’s supply path optimization (SPO) strategy. Ask the DSP what level of reporting it can offer, including the ability to segment performance by FPAs and second-price auction (SPA) types.
Does the DSP offer a “bid shading” solution?
Bid shading is the process of reducing a bid price by a certain percentage depending on the auction type. A brand might be willing to bid $10 in an SPA but would prefer to bid 20% lower in an FPA. If a DSP has a “bid shading” solution, it can then recognize an FPA ad opportunity in the bid request and dynamically reduce its bid by 20%.
Auction dynamics and SSP solutions
In addition to the demand side, brands should also be working closely with their SSPs through which they are buying inventory. Here are a few questions to evaluate SSP partners:
Does the SSP follow the ORTB Spec for auction type?
Before a DSP can make decisions off different auction types, the SSP must first be able to provide that information in the bid request. Ask the SSP if it is sending the auction type in the bid request via ORTB.
Does the SSP provide “opt out” capabilities for DSPs?
Since not all DSPs have updated their platforms to ingest or optimize around auction type data, it’s important that SSPs provide the ability for these DSPs to opt out of FPA bid requests. Ask the SSP if it can exclude these DSPs who may still be developing the technology to support FPAs or training its teams on the concept.
What unique data does the SSP offer around auction type?
SSPs can offer unique reporting details that go beyond the information available to DSPs. This data can provide insight into a brand’s past bidding behavior and ensure it is not wasting opportunities on bids that never convert into impressions.
Important metrics SSPs can provide include:
- Average bid price to floor – The difference between an advertiser’s bid price and the publisher’s inventory price floor (could be both + or -)
- Below floor rate – The percentage of bids below the publisher’s price floor at the time of the auction
- Block rate – The percentage of bids declined per a publisher’s blocking rules
- Loss rate – The percentage of bids that an advertiser lost in the SSP’s internal auction
- Outcompeted rate – The percentage of bids that lost due to being outcompeted in the SSP’s internal auction
- Win rate – The percentage of bids that an advertiser won in the SSP’s internal auction
With the right ad partners providing valuable and unique data, brands can effectively analyze their current auction dynamic performance — but that can be a daunting task. In the next article, we’ll conclude our series by laying out a four-step approach to collect, analyze, and take action from auction data and performance.
You can get access to these ad partner questions now by downloading the entire Video Buyer’s Guide to Auctions here or check out the rest of our auction dynamics series:
- Week 1: Understanding auction dynamics
- Week 2: Thoughtful and robust bidding strategies
- Week 4: Running an auction performance analysis
This article was written by Nick Hoffman, director of global client education at SpotX.