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Pacing Algorithm for Advertising Campaigns and Inventory Allocations

I was trying to figure out what to do with my Sunday. My options were: build a little header bidding ad server plugin for WordPress; run, sleep and eat; or write up some blog post on a pacing algorithm, because people still seem to be producing crappy ones. Since you’re reading this, you can probably guess which choice I made. I mean, it’s not the first post I’ve written on the subject.

It showed up again last week. I didn’t expect it, but I guess I never do. A saw-tooth pattern on a chart, indicative of a capping of sorts. A chart that says, “I want a thing to happen, but only so much.” In this case it was a traffic allocation. This was a surprise.

A little (bad pacing algorithm) history

Most of the time when I run into a bad pacing algorithm it’s in the form of a campaign trying to limit itself. It only needs to acquire a few thousand impressions every five minutes, for example. So the hastily written algorithm might divvy up the impression allocation into five minutes buckets. Effectively that’s 12 buckets every hour. So it takes an hour’s worth of impression needs and divides it by twelve. One twelfth of the impressions are purchased every five minutes. Unfortunately at that point it switches to a simple counter that says, “for the next five minutes buy impressions until the number purchased reaches 1/12th of what I need in this hour.”

You end up with a purchase graph that looks like this.
Sawtooth Pattern exposes a bad pacing algorithm

See that blue spiky thing? That’s the one that’ll get ya. Read on to find out how this impacts the industry and how to fix it

Header Bidding: The Good, The Bad, And The Ugly

Header Bidding: The Good, The Bad, And The Ugly

Whether you think it’s a fad, a “hack,” the new standard, or the latest shiny object, header bidding has had a significant and disruptive impact on the advertising technology ecosystem. It may only be a matter of time before Luma Partners adds header bidding wrappers as a new box to their (in)famous landscapes.

The promise of header bidding with multiple exchanges has yielded positive results for advertisers and publishers but it has come with a cost that, over time, might be too much to bear. Whether it survives the fray, or evolves into something new, header bidding has changed the game forever.

Header Bidding: The Good

The movie stars Clint Eastwood. As The Good guy, he is not necessarily altruistic in nature, but he’s really good at capitalizing on opportunities.

Header Bidding brings those opportunities by providing premium inventory into the programmatic marketplace. No longer  are the best impressions locked away in the tower of publisher ad servers. They are now accessible via  the myriad of sophisticated Seller-Side Platform (SSP), Exchange and Demand-Side Platform (DSP) technologies. This gives sellers more articulate controls over the rules of engagement for every transaction.

Retargeting, made easier by RTB, can now be applied at all inventory priority levels, improving yield for commerce sites. Elusive audiences could be more readily captured by private marketplaces and the open auction, inviting new advertisers to test, refine, and commit to new deals with new partners.

Meanwhile, demand side systems are given the opportunity to bring more premium buying contracts to their platforms. This could be why some publishers started seeing higher revenue with header bidding in play. During Advertising Week in New York, one publisher cited header bidding as being responsible for 50% lift in CPMs. These types of statistics have been echoed by several others in the industry. While this might not be the panacea that saves the online newspaper, it certainly helps keep a few more lights on.

Next: The Bad

The promise of header bidding: Opening up premium inventory to programmatic channels

This article was originally published in Venture Beat on November 29th, 2016. I have written previously about the conundrum of header bidding. While my thoughts back then are still valid, the technology has progressed and the market is following. Following this, I’ve posted the good, bad and ugly of header bidding.

header bidding

Everyone is talking about the promise of header bidding, but what does it really mean to the future of publishing and mobile monetization? Header bidding is leveling the playing field by allowing sellers to make more intelligent inventory allocation decisions between traditional and programmatic demand. For advertisers, it allows for better campaign delivery and optimization by providing more access to audiences at scale.

By implementing header bidding, publishers and app developers are able to expose every single impression to a programmatic marketplace. Many sellers are already reporting 40-50-percent increases in CPMs, and buyers have a new ability to bring their data to bear across multiple inventory sources.

Next: The evolution, yield opportunities and scale

Page Performance and Ad Tech: Speed is still a feature on the open web

Maintaining a good user experience while delivering quality content, and paying for it

Page Performance - A cautionary tale

Page performance has been cited as a reason to install an ad-blocker. In fact, a recent straw poll suggests that 71% of ad-blocker users would whitelist a publisher website if the page performance didn’t suffer. Blocking ads, which can be half of the content of a web page, will almost certainly improve the page performance. Mozilla Firefox even has a “reader view” available for many pages that removes all the content except the main body copy. That feature goes as far beyond ad blocking as you can get.

The four things that slow down page performance are:

  • the number of requests the browser is making
  • the time it takes for a response
  • the payload associated with each request
  • the code executed on the page once the request is fulfilled

In many cases the executed code will make additional requests and the dance starts all over again. This process takes a toll on page performance and each browser responds a little differently to the tasks. The browser may appear sluggish or unresponsive while the page elements are loading, executing or rendering. It may present the loading icon in the tab, which itself can freeze.

Next: Browser limits and performance tuning help

Floors In RTB: Are hard and soft reserve prices known to the DSP?

I assumed that before bidding, DSPs could not be sure whether an SSP applies floor price rules to an auction. Now, I saw some remarks in the academic literature implying that buyers know about the existence or even the exact quantity of floor prices.

In practice, do SSPs communicate their floors?

This question was asked on quora, below is my answer.

Floor Prices in an AuctionThe answer is: sometimes. Exchanges sometimes express floor or bid guidance in the bid request. This is not required for the market to operate; so many exchanges do not provide any guidance. Floors are almost always in play. In most cases they are dependent on a wide variety of variables including: the site, browser, device, day of week, time of day, audience data, user’s language, and geographic location of the user.

Auction Mechanics

Floor prices, from an academic standpoint, are there to protect the base value the publisher has placed on the inventory. Bids falling below the floor, or reserve, are usually rejected by the exchange. Losing bid information might be recorded to give the publisher insight on the value advertisers are placing on the inventory and accompanying traffic. Next: Price Floor Discovery