What is Programmatic Advertising? How Does it Work?
- October 5 2020
- 158 views
RTB bidding logic
The bidding request generally includes:
1. ID(Unique ID of the bid request, provided by the exchange.)
2. Imp(impressions offered. At least 1 Imp object is required.)
3. Site(website, Only applicable and recommended for websites.)
4. App(Details about the publisher’s)
5. Device(device which the impression will be delivered.)
6. User(user of the device; the advertising audience.)
7. Test(Indicator of test mode in which auctions are not billable)
8. AT(Auction type, where 1 = First Price, 2 = Second Price Plus.)
9. WSeat & BSeat(White list of buyer seats (e.g., advertisers, agencies) allowed)
10. AllImps(Flag to indicate if Exchange can verify the impressions)
11. Cur(Array of allowed currencies for bids on this bid request using)
12. WLang(White list of languages for creatively using ISO-639-1-alpha-2.)
13. BCat(Blocked advertiser categories using the IAB content)
14. BAdv(Blocking list of advertisers by their domains (e.g., 'ford.com').)
15. BApp(Blocking list of applications by their platform-specific exchangeindependent)
16. Source(It provides data about the source of inventory and which entity makes the final decision. )
17. Regs(That specifies any industry, legal or governmental regulations in force for this request.)
18. Ext(Placeholder for exchange-specific extensions of OpenRTB.)
Advertising management platform: Advertisers set delivery strategies such as delivery time, advertising budget, delivery country and region, and user attributes on the advertising management platform.
Bidding engine: decide whether to participate in the current advertising bidding, and mainly refer to the current media quality, user groups, competition degree of media resources, rate of return and other dimensions for bidding optimization. If the platform has anti-fraud function, it will also filter traffic, identify fraudulent traffic and feed the results back to the bidding engine.
Bidding settlement rules
1. First-Price Auction
If the bidding is successful, the transaction will be completed according to the bidding price. This maximizes the potential revenue of the seller.
2. Generalized Second Price Auction
Hereinafter referred to as GSP, that is, the highest bidder wins the bid and settles with 0.01 yuan more than the second highest bid price.
On the surface, using the highest price settlement can make the media receive higher prices and earn more money. But in fact, this model will make people tend to understate.
In the RTB bidding environment, "bidding means winning or losing", so every buyer wants to win traffic with the most suitable price. Using the second highest price settlement means that another buyer is willing to offer the same price, which accords with the buyer's psychology of "the most suitable price", and the bidding will be more proactive.
3. Header Bidding
One-price bidding, the publisher puts a code on its webpage header, allowing a limited number of advertisers to bid on their advertising resources. This enables advertisers to compete for high-quality reserved inventory before or instead of the second-price auction.
4. Price Floor
The publisher accepts the lowest price of its inventory. The publisher will ignore all bids below this price. In fact, this will turn the second price auction into the first price auction.
5. Clearing Price
The final price paid for an impression
How It Works
Here’s a simple example of what happens when you place a bid in a first-price versus second-price auctions:
AdX/SSP floor price rule
1. Fixed reserve price: set a fixed reserve price for the advertising space, and DSP can obtain bidding qualification only when bidding is higher than the reserve price.
2. Double reserve price: the reserve price of advertising space is unified to 0, and the implicit reserve price is set at the same time (only for distinguishing settlement mode, assuming 2 yuan). When the bid price is greater than 0 and lower than 2, it will be settled with the highest price; when the bid price is greater than 2, it will be settled at the next highest price.
3. Static multiple reserve prices: different reserve prices are set according to different attributes of traffic and different industries of advertisers.
4. Dynamic multiple reserve prices: dynamically set different reserve prices according to the quality of advertisements. For example, advertisements with high click-through rates may get lower reserve prices, thus prompting them to increase their delivery volume.
Bidding related indicators
Bid request volume, pre-filtered request volume, actual sending request volume, actual sending rate, bidding times, bidding rate, bidding abandonment times, bidding abandonment rate, effective bidding times, invalid bidding times, response timeout times, parsing error times, successful bidding times, successful bidding rate, exposure times, bidding failure times, bidding failure rate and utilization rate.