Throughout this auction dynamics series, we’ve discussed how brands can take a more proactive approach to their supply path optimization (SPO) through auction dynamics. In this final article, we’ll walk through a four-step auction performance analysis process to collect, analyze, and take action from performance you’re experiencing in both first-price auctions (FPAs) and second-price auctions (SPAs).
Effective dynamic auction strategies must include an awareness of current auction performance and an assurance that a brand is bidding on impression opportunities at true value. Work with your ad partners to request this data each month. Supply partners, like SpotX, can provide this intelligence through detailed bidding data, broken out by both FPAs and SPAs.
By performing an auction performance analysis each month, brands can continually assess and streamline their dynamic auction strategy and have informed, data-driven conversations with their ad partners.
Q: What percentage of ad requests are FPAs versus SPAs?
To start, brands should ask their supply partners for an FPA vs. SPA breakdown of the previous month’s ad requests for each of the DSPs through which they are buying. This will provide initial insight into how consistently they are exposed to the full range of available inventory. Remember: As more and more inventory is exclusively conducted through FPAs, it’s important to understand how many of those opportunities are sent to the DSP.
Q: What percentage of delivered impressions are FPAs vs. SPAs?
The percentage breakdown of ad requests is only half the story. The next step is to see how many of those requests are turning into impressions. For each DSP that had a high percentage of FPA ad requests, break out the percentage of impressions for both FPAs and SPAs to see a general conversion rate.
Q: How are CPMs clearing for FPAs vs. SPAs?
Now that you have determined which DSPs are actually buying a high volume of FPA impressions, it’s time to see how their CPM rates compare across the two auction types. This will vary depending on each brand’s overall goals.
Q: How does CPM compare with quality or performance?
CPMs alone cannot indicate which inventory types are most effective. While brands might not be able to buy as many ad placements with a higher CPM, the impact of high-quality placements might outweigh the volume of placements one would get through low-priced alternatives. To calculate this tradeoff, brands need to break out their key performance indicators (KPIs) for both FPAs and SPAs. This will be different for each brand, but it might include metrics like viewability, overlap, completed view rate and click-through rate.
For effective SPO, brands need to embrace a multifaceted approach — one that includes a deep understanding and analysis of their dynamic auction performance. By understanding the bidding process, working closely with ad partners to receive transparent reporting, and taking an active role in analyzing auction performance, brands can have robust and data-driven conversations with their DSP and SSP partners and powerfully optimize both FPAs and SPAs.
In our downloadable Video Buyer’s Guide to Auctions, we’ve outlined an additional detailed explanation of how to interpret this data and recommended next steps for each. You can download 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 3: Evaluating ad partner capabilities
This article was written by Nick Hoffman, director of global client education at SpotX.