Bid Caching: Just Another Auction Game With Unknown Rules

But this isn’t the first – and, unfortunately, is likely not the last – SSP to be less than fully transparent about how the rules of their game is played.

Full disclosure: We have worked with Index Exchange more than 100 times over the years and were once hired directly for a project. For what it’s worth, we have found IE historically to have some of the lowest fraud levels of supply compared to the other major North America display and mobile SSPs. The team has demonstrated transparency and strong character in many areas, dating back to their Casale Media days. And the talking points they sent us about bid caching are in line with their typical practices, though it appears that it is the only SSP to be discovered using bid caching, which it has since stopped.

But in our society today, especially in the United States, where transparency is at a premium at certain levels of government and our industry, it is understandable for players of the game to storm the castle with torches and pitchforks every time the rules are not clearly laid out ahead of time or before changes occur. We have seen this with soft floors, buy-side fees and first-price vs. second-price auctions. One consistent analogy between SSPs/early-Xaxis/Criteo and financial markets is that in any inefficient market, market makers will look to create efficiency, benefiting themselves and hopefully others in the market.

It is no wonder brands continue to question programmatic practices, while still – for now – increasing spend every year. And it’s why some TV and out-of-home execs who have never done a single programmatic buy or sell, but read and hear plenty about it, think programmatic is not for them, when it would be if done the right way. And it’s why more private marketplaces should be transacted versus open auctions. And why demand-side platforms (DSPs) and smart brands, including P&G, Amazon or Netflix, are motivated to push for more server-to-server integrations and remove SSPs from the equation entirely.

Fortunately, our industry is starting to favor trust and transparency more, not just in voice but with publishers’ inventory and advertisers’ spending. If SSPs and DSPs don’t start coming clean with other auction games, shenanigans or inconsistent rules already taking place or on their road maps, it will be those companies and executives who will be truly “Sorry.”

Follow Matt Prohaska (@mattprohaska), Prohaska Consulting (@TeamProhaska) and AdExchanger (@adexchanger) on Twitter.

This post was syndicated from Ad Exchanger.