Bid Duplication Risks And Challenges For Marketers

The Anatomy of Bid Duplication

Bid duplication, in essence, refers to the replication of bid requests within the programmatic advertising ecosystem. This occurs when the same bid request is multiplied and sent out to various Demand Side Platforms (DSPs) through different Supply Side Platforms (SSPs), leading to an inflated perception of available ad inventory.

The Root Cause: Header Bidding

The advent of header bidding, a technique that allows publishers to offer their ad inventory to multiple ad exchanges simultaneously before making calls to their ad servers, has inadvertently given rise to bid duplication. This is because header bidding allows the same ad slot to be bid on by multiple DSPs, often unbeknownst to them.

A Complex Web of Duplication

The bid duplication process is laughably intricate. Instead of a single bid request for an ad slot, DSPs are bombarded with multiple identical requests, making it virtually impossible to distinguish between them. The result is a convoluted and inefficient process that wastes time, resources, and ultimately, money.

The Impact of Bid Duplication

Bid duplication, while seemingly innocuous, has far-reaching consequences that permeate the entire programmatic advertising ecosystem.

On Publishers and Advertisers

For publishers, bid duplication can lead to a decrease in revenue if they attempt to rectify the issue independently. This is because reducing waste from bid duplication could deprive SSPs of the opportunity to sell everything under the current setup.

Advertisers, on the other hand, are forced to navigate through a sea of duplicate bid requests, which impairs their ability to scale campaigns. Moreover, they run the risk of overpaying for ad slots due to the artificially inflated demand caused by bid duplication.

On SSPs and DSPs

SSPs and DSPs are also victims of this phenomenon. Processing billions of bid requests is not only expensive but also contributes to skyrocketing cloud bills. To mitigate this, many SSPs and DSPs have turned to traffic shaping, a technique that filters excess bids. However, this solution does not tackle the root cause of the problem and often exacerbates the negative effects of duplication.

The Path Towards Resolving Bid Duplication

Bid duplication is a complex issue that requires an industry-wide solution. Simply altering algorithms or implementing policy changes will not suffice.

Algorithmic Adjustments

One possible solution lies in the hands of DSPs. Many DSPs function based on a volume bias, assuming that publishers with more ad impressions for sale are more valuable. As such, they tend to return more bids for the same ad impression, contributing to the problem of bid duplication.

Policy Changes

On the policy front, The Trade Desk, a prominent DSP, has made significant strides. It has proposed the use of Global Placement IDs (GPIDs), which would help deduplicate impressions. However, the adoption rate of this policy is currently unclear.

Industry Standards

Ultimately, addressing bid duplication may require the intervention of an industry organization. Instituting industry standards could provide a unified approach to tackling this issue, ensuring that all players in the ecosystem are on the same page.

Conclusion

Bid duplication is a formidable challenge in programmatic advertising. Despite its complexity and deep-rooted origins, it is an issue that cannot be ignored. The industry must come together to find a sustainable and effective solution that addresses the issue at its core. Only then can the programmatic advertising ecosystem function optimally, benefiting advertisers, publishers, SSPs, and DSPs alike.