Programmatic Advertising: The Vicious Cycle of Bid Repeating 🐍😈

Well, well, well… French digital media publication Journal du Net (JDN) beat us to it!
👉 https://lnkd.in/eas5cxgz

We'd had this post waiting in the wings for a while 😂🤣 But here's our take anyway 😉

There's an open secret on the sell side of programmatic advertising that every yield manager knows: a publisher's share of buying opportunities isn't necessarily proportional to its actual traffic. It can also depend on how many bid requests (BRs) that meet buyers' filters it manages to generate.

Connecting more supply-side platforms (SSPs) can therefore, in theory, inflate a publisher's bid request volume. The same ad opportunity gets sent repeatedly through different SSP seats, artificially multiplying the apparent supply. DSPs cannot always reliably identify that those requests relate to the same opportunity—which is exactly why Transaction ID (TID) matters: https://lnkd.in/eKMDtekR

This is known as Bid Repeating.

But here's the catch… this strategy doesn't deliver the promised results 👎
Worse, it can drag the entire programmatic ecosystem down 📉

Why Does Bid Repeating Hurt Programmatic Advertising?

Connect the same exchange through 15 different seats and you might multiply the bid request volume by 15. But you certainly don't multiply publisher revenue by 15.

Meanwhile, SSPs and DSPs incur infrastructure and processing costs for auction calls, while their revenue depends on impressions actually sold. Excessive bid duplication therefore puts pressure on bidder margins 💸💸😡

Publishers are performing a miracle of multiplying the loaves… by burning through all the bidders' flour 🥖🥖🥖🔥😱

To protect themselves, bidders use throttling algorithms to filter out large volumes of low-value bid requests 🪓🪓🪓
👉 https://lnkd.in/eppZCwS4

How Much Inventory Can DSP Throttling Remove? Our Case Study

Think throttling is a tiny, marginal phenomenon?

We ran a small investigation:

1. From a curator seat, we examined the volume of bid requests sent toward DSPs by an exchange's SSP seats for a major news publisher.

2. We then checked the estimated bid request volume available after throttling for that same publisher and exchange in a DSP planner, through the open auction.

How big was the gap?

…
…

The answer: -95% 😱

And that was just the DSP-side throttling in this specific comparison. It's an illustrative observation, not a market-wide average.

Why Does Bid Repeating Create a Vicious Cycle?

Here's where the snake starts eating its own tail:

1. The more publishers duplicate bid requests, the more bidders are incentivized to throttle low-value traffic.
2. The more bidders throttle, the more publishers may try to recover reach by adding reseller paths—and paying additional intermediary fees.

🐍 More duplication. More throttling. More resellers. And potentially even more duplication.

On some exchanges, reseller seats account for as much as 80% of bid requests, according to the example discussed here:
👉 https://lnkd.in/eDSsuiNS

How Does GreyFox Ads Reduce Bid Repeating?

At GreyFox Ads, our approach is straightforward: we prioritize publishers' own SSP seats rather than multiplying reseller paths.

That means cleaner supply paths, fewer unnecessary intermediaries and a more direct route to quality Open Web inventory.

Simple. Fast. Effective.

Looking for a Quality Programmatic Advertising Partner?

📩 Contact GreyFox Ads to discuss your display and video advertising challenges!

Original LinkedIn post: https://lnkd.in/ejDPzK5S