Advertising Technology

Can I Get Multiple Bids For This Ad Space? Please?

There’s a lot of talk about online ad creativity, and for good reason – the bulk of display dollars are still transacted within a set of ad sizes that haven’t changed much in 10 years. With AOL and the IAB pushing the boundaries of display ad units, these innovations could and should come to real-time bidding (RTB), but the marketplace needs to evolve first. Here’s one approach that might help us get there.

In RTB, for every impression, bids are submitted from different demand-side platforms (DSPs) and a DSP with multiple clients that want a specific impression only submits one of its clients’ bids – the highest one. This is effectively an internal auction within the DSP, and it prevents the supply-side from seeing the true level of demand for impressions – perhaps five buyers wanted that impression instead of just the one that was exposed. That reduction in bid density lowers average clearing prices and also drives sellers to controversial means of raising prices.

Receiving multiple bids per impression from DSPs has commonly been proposed as the best way to get closer to the prices publishers want. If DSPs were to submit multiple bids per impression, they would submit a bid for every client, no matter the bid prices – perhaps with a reasonable upper bound cap to prevent an overwhelming bid stream. The denser bidding stream would certainly be more likely to drive a higher price, which publishers seek. However, a truly complete auction could also unleash creative opportunities currently blocked by many publishers, which buyers want. The good news is that I am just starting to see the first wave of platforms adopting this model, meaning that this is starting to become a reality. And beyond just increasing bid density, the potential creative opportunities that are present under the model are exciting and worth exploring.

Advertisers increasingly request richer formats, sizes and advanced creative options. Publishers won’t sell premium ad sizes (300x600s, rising stars) and executions because they perceive RTB as a demand vehicle that typically clears at lower prices. Hence, there’s a wide gap between CPMs in exchanges versus direct sales. For this reason there tends to be heavy blocks and restrictions imposed by publishers that prevent these kinds of rich opportunities that the buy side increasingly requests to be transacted. So, if a buyer only has one bid, and then bids on a placement with rich media creative, but the publisher blocks it, the bid that otherwise could have reverted to a standard execution may be lost. Also common, an ad space that could be more – many 300x250s are capable of also serving 300x600s – is only offered in one size dimension, the smaller one. This is artificially limiting the model’s potential.

Instead of just a static, fixed dimension unit, what if publishers presented impressions as an opportunity to buy without creative restrictions and with a variety of size options, each ultimately with its own floor price? This way ad space would come with the option of being a premium unit, like an expandable ad, or AOL Devil ads, or other IAB Rising Stars. A publisher would only sell an execution like this for the right price, but at least the opportunity to do so would be seamlessly accessible to advertisers. Enabling buyers to place multiple bids in each auction gives true insight into the overall potential scope of opportunity behind that ad space, and buyers who want upgrades can access them easily.

Let’s say Ford has a static and an expandable creative on its RTB media plan. Today, each time it attempts to bid with the expandable creative on a specific publisher’s impressions, it gets blocked. In this case, Ford loses all the time. When it bids with its static ad it probably wins a fair amount because there’s inventory available. But if Ford could bid with both styles of creative at the same time, assuming it meets the sell-side price needs, Ford would end up winning more of the rich opportunities it truly wants, and where it can’t pay enough, it would at least have the opportunity to run its static unit. The publisher will see more of what they want (higher CPMs), all by using the same space.

Effectively, the RTB model would be capable of morphing ad spots based on who and what wins the bid. If the price for expandable is too low, the publisher goes with static. If rising star is too low, it goes with an expandable and so on. The best quality and value bid wins. Advertisers that want premium units would bid more for them – and I hear that plenty on the demand side want this. You’d be hard pressed to find a brand that doesn’t want a bigger canvas.

To draw a parallel, if you want a diamond ring, and all you see available is the princess-cut solitaire diamond, you’re going to keep bidding the same way. But if you really want a specialized ring with extra diamonds throughout, you have to show the seller that you want this, and that you’re willing to pay more for it. What’s happening today is the seller may have what you want, but she doesn’t show it because she thinks you’ll just bid the same price as always.

If buyers and sellers look at multiple bids per impression as a creative opportunity instead of just a means to increase clearing prices, this could reinvent the entire buy-sell process in RTB. This could potentially unlock more brand dollars and, in turn, make RTB a more effective part of ad sales. Buyers: show your intention. Put in multiple bids. Tell that seller to add that extra row of diamonds and that you’d pay for it. Who wouldn’t want to add more sparkle to their ads?

  • http://www.facebook.com/jaymfriedman Jay Friedman

    dead on. RTB is driving CPMs up for the publishers that do it right.

  • http://twitter.com/geeroo Mayuresh Phadke

    Depends on where you would want to do the optimization.

    Publishers would like to have multiple bids, since it allows them to optimize, whereas DSPs would like to optimize on their side and give single bids.

    • http://twitter.com/james_curran James Curran

      Yep. And if pubs want more bid density, they make more connections into as many platforms as possible to boost bids on their inventory. Whereas, if marketers want more bids in, they either use a DSP with multiple bidding capability, or use more than one DSP. (Yes, we see this happening.)

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