The Impact of Multi-Bid: Decreasing Deadweight Loss

Andrew Baron, Director of RTB and Revenue Operations
Andrew Baron, Director of RTB and Revenue Operations

Last year, we unveiled “multi-bid,” a forward-thinking protocol that improves performance on the buy and sell-side of the ad ecosystem by increasing the volume of bids in the marketplace. We projected the effects, but now we have the data to prove impact as well as lessons learned. The key takeaway is that multi-bid decreases marketplace frictions, which in turn creates efficiency. Said more dramatically (and while wearing a pocket protector), multi-bid decreases deadweight loss.

First a quick review. How does multi-bid work? PubMatic first sends the bid request to DSPs describing the potential impression and DSPs then respond with multiple bids, each of which has a description for potential creative. PubMatic’s system then evaluates these bids against publisher settings and other bids and selects the winner.

Buy-Side Benefits

In a multi-bid environment, advertisers and agencies first benefit from increased inventory exposure or access. We saw buyers increase their participation rate by 40-100%. With this increase in participation, we saw a subsequent increase in the buyer’s importance to the publisher’s business: a 115-130% growth in the buyer’s share of the publisher’s advertising revenue.

From the technology provider’s (read: DSP’s) perspective, multi-bid increases response effectiveness and business intelligence. The best efficiency metric that we can measure on behalf of a DSP is its throughput, as defined by media spend/QPS, which grew 10-15%. The primary driver here is an improved win rate, which grew 45-100%. It’s important to note that a growing win-rate does not just deliver short term ROI benefits, but also increases the DSP’s business predictability. While foresight is a critical piece of building business intelligence, another is learning from past experiences; through multi-bid, DSPs have increased their auction results feedback by 30-40%.

Sell-Side Benefits

With regard to multi-bid, publishers are primarily focused on increased marketplace liquidity. Bid density grew 40-100%, which drove 5-10% growth in fill rates, the end result being a 10-15% increase in publisher advertising revenue. Premium publishers accrued a disproportionate share of value. DSPs used multi-bid to go after higher valued audiences in higher valued contexts, evidenced by a 20-70% price difference between impressions attracting multiple bids and those attracting single bids. Lastly, publishers grew their lost opportunity insights by 30-40%, which is valuable in effectively managing a healthy discretionary revenue channel.

What We Have Learned

How was multi-bid effective? It helped reduce publisher imposed frictions (read: brand controls). In an environment where more bids are available, advertiser blocklists, advertiser category blocks, and even advertiser whitelists could continue delivering strategic value without sacrificing as much revenue. Premium publishers tend to use these brand controls most heavily, and DSPs are aptly concentrating their multi-bid efforts on these high-valued contexts and audiences. Multi-bid value accrues to the industry’s head.

We’ve seen both successful and less successful tactics in avoiding brand control frictions. DSPs should submit a variety of advertisers and advertiser categories in each multi-bid response—in other words, don’t submit multiple bids from the same advertiser and don’t submit multiple bids on behalf of advertisers all from the same vertical, for example.

Multi-bid has proven to be the most efficient means to securing the most valuable content and users. In the absence of multi-bid, a buyer depends on a feedback loop of past actions to achieve future successes. Since publisher brand controls are dynamic, and not always transparent, the aforementioned feedback loops repeat, iterations multiply, and direction forward may not be clear. People and infrastructure costs consequently increase. Multi-bid allows buyers to realize efficiencies ahead of these feedback loops – it’s like learning to fish while eating a salmon dinner.

In conclusion, it’s early days for multi-bidders. It’s still a buyer’s market where early adopters and power users are capturing much of the value created. As adoption and usage continue to grow, we expect to find an efficiency plateau at some point in the future, but we aren’t there yet. Win-rates continue to increase—and do so at an increasing rate—with each additional bid submitted. Said differently, the eradication of deadweight losses is accelerating!


To read more about the advantages of a multi-bid RTB environment, you can download our whitepaper: “The Advantages to Publishers, Advertisers and the Ecosystem of a Multi-Bid RTB Environment (Q4 2012).”

The Here and Now of Mobile: What Publishers Need to Know

Bob Walczak
GM, Mobile & Video

Every time I see another press release about a firm in the media and ad tech space staffing up to prepare for mobile I have to smile to myself. Just this month OpenX hired a bunch of new execs to adapt their desktop technology to mobile, while at their annual summit this month AppNexus announced that they plan to revamp the company around mobile, as founder Brian O’Kelley noted “desktop is dead.”

While I’m glad that there is finally a ton of excitement and development effort going into mobile, it’s more important for our clients to understand the current state of the mobile market. At PubMatic, we’ve got the product and process in place and are making it easier than ever for publishers to monetize mobile. I won’t get into an “our stack is better than theirs” discussion, but I will offer some words of advice about how to approach the unique aspects of the market:

  1. Mobile is Not Desktop. There is a key difference in the behavior of mobile buyers than desktop. In mobile, buyers bid less but win 95% of the time. Campaigns all fill 100%. In a market with far more supply than demand, buyers want specific impressions. They expect more targeting. They’re looking for lat/long data and location functionality on impressions and whether an ID was available. Where desktop is often a buckshot approach, mobile is a precision target.
  2. Data is the Premium in Mobile. This precision buying behavior has redefined what is premium in mobile. Properties like ESPN and Pandora acknowledged the mobile shift early on and pushed the market along, but they did so with the right type of enriched impressions to make them able to monetize. Publishers have to understand that you can’t sell mobile just by virtue of being a media brand. They also need to have the right data parameters to push supply and demand. We don’t have too many mobile impressions in the market; we have too many unqualified mobile impressions.
  3. Increased Data Increases Competition. To that end, mobile will become a more efficient market when increased data on impressions leads to increased competition. That will drive scarcity and deliver on what is truly premium in mobile: data enriched impressions.
  4. Transparency is Key. Buyers demand to know what they are getting with transparent targeting parameters. Publishers need to get over their fear of channel conflict and designate quality impressions, and they need to do so openly.

What else do publishers need to know? First and foremost that we’ve created a mobile auction and it’s available now. It increases the performance and competition over mobile with full demand side transparency. We’ve also released an open SDK—essentially a self-serve tool for app providers—that will make our supply that much richer for the demand side. Just this past April, we enhanced our platform with 30 third-party data parameters and up to 20 first-party parameters—10 times more than in desktop—because that’s what mobile demands. By adding the ability to combine first-party, geo, carrier, and device data into the PubMatic platform, publishers can create the premium inventory that sells. We also understand publishers’ fears of maintaining appropriate ads on their mobile content, and we have a custom solution that filters and blocks brands unwanted by the publisher. AdTruth has been integrated for identification and TRUSTe for privacy—all ensuring quality for buyers, sellers and users.

Yes, the mobile ad market is still in its formative days and we have a lot of work to do to increase bid density. But at PubMatic the building blocks of mobile buying and selling are in place and functioning smoothly. Mobile at PubMatic is about the market now as well as what it will be next year—it’s not just a press release or line item on a development plan.

Enriching Mobile, Embracing Data

A blog post by Frederic Prigent, Country Manager, FR, PubMatic

fpIt feels like we’ve been talking about Mobile for infinity in the online advertising landscape, with both concerns and great excitement. Every year technology platforms announce new outstanding systems created to enhance mobile advertising, building solutions to remove apprehensions around Mobile Tracking and Targeting. However, it still remains in the back of everyone’s mind, and as 2013 ends a successful first quarter, we reflect back at the discussions and debates we’ve all been swept up in around Mobile. How can we target without Cookies? How can we drive loyal users and measure performance? How can we ensure mobile devices are all tracked to the same standards?

All these anxieties around mobile all come down to one factor: lack of data. Unlike desktop, mobile presents a new challenge for technology partners to collate enough data to ensure both advertisers and publishers can trade premium impressions and not compromise the user experience. Collecting data for mobile is a different process to what we all know so well with desktop. Without cookies, we have to draw data from other offerings within the mobile environment; Geo, age, device type, carrier and so on. These pockets of data then have to extract a wide range of user related parameters which in result will add value to impressions.

PubMatic has recently launched a new set of Data Enrichment products, built to relieve all concerns around mobile, and enhance the buy and sell of digital media. Our mobile product package provides the opportunity to optimise data, by layering over 30 parameters of 3rd party data, and 20 fields of 1st part data values onto every impression. Applying these extensive parameters will enrich the value of every mobile and tablet impression passed through our platform, adding significant value to media where needed. Priding ourselves and our expertise within our market, we have recognised the trends within programmatic trading, and we know that enhanced, enriched data can more than double or triple the value of inventory. We saw mobile paid impressions experience an unprecedented growth of 1425% between Q1 and Q4 in 2012, emphasising that programmatic selling is becoming an increasingly viable way for publishers to monetize their mobile inventory.

PubMatic now has the capability to accept and offer a wide variety of options when tracking across mobile, providing four substantial solutions:

  1. We can accept and extract user data such as Unique User ID, Location (both latitude and longitude), Country, State, City, DOB, Ethnicity, Gender, Carrier etc. Location data in particular can allow advertisers to target specific users across all screens and work creatively to suit each device.
  2. We also have the ability to target campaigns against device, having the capability to reach Feature Phones, Smart Phones, Tablets, Video support, Pointing methods and so on. This proficiency will detect a variety of screen resolutions, shape and size offering a scope of platforms in which to engage with.
  3. PubMatic is now able to detect the carrier per device, which in affect takes the IP address from the user as the input, and sends to the carrier engine. This will encourage carrier parameters such as connection type – cellular/wifi.
  4. Having assembled all data parameters mentioned above, we can map all 1st party data into our API, enabling our demand partners to qualify and easily ingest.

PubMatic’s mobile offering has been implemented to ease the trading of media across all screens, whilst offering great value and uncompromising the user experience. With our new and exciting Data Enriching offering, we can now begin to discard all previous concerns around mobile, and begin looking across all devices.