Moving from Waterfall to Bidding with In-house Mediation

The purpose of a transparent and successful bidding process is to find the highest paying ad among all demand sources in real time. To help achieve this, each demand source needs to have an equal opportunity to bid for every impression, and there needs to be a good level of competition between demand sources.

An all-bidding integration is ideal for maximizing publisher revenue. However, since some demand sources do not yet have bidders, it is often necessary to combine bidding and waterfall systems. Follow the steps below to create a mixed system. Keep in mind that an all-bidding system will outperform a mixed waterfall and bidding solution.

Things to Keep in Mind

  • Start by following the bidding best practices.
  • If you’re using existing waterfall placements, there’s no need to make any changes in Monetization Manager, as all placements are configured to automatically receive and send bidding traffic. We recommend using top of the waterfall placements.
  • You can also create new placements to use exclusively for bidding. Please allow 48-72 hrs after sending traffic for the placement to calibrate in our systems.
  • For mediation integrations, please find more detailed instructions about using placements in the best practices.
  • If your business doesn’t have access to bidding features in Monetization Manager, please reach out to your sales representative to request access.

Integration Methods

Inserting Bid into the Waterfall (recommended)

How it works:

  1. Request a bid and insert the winning bid into the relevant position in the waterfall.
  2. Run the waterfall and check for fills.
  3. If you reach the bid then the bid will win.

This is the most efficient and best method in terms of latency. Never compare a winning bid with an estimated waterfall entry, only compare with a filled waterfall entry.

Running bidding in parallel with Waterfall (if the above isn't possible)

How it works:

  1. Run Bidding in parallel with Waterfall
  2. Compare the winning bid with the filled impression from the waterfall

Running through the entire waterfall will have a higher latency than the example above. Never compare a winning bid with an estimated waterfall entry, only compare with a filled waterfall entry.

For this method, every bidder has access to every impression opportunity, making the existing waterfall more competitive by giving each demand source a better chance to compete for different CPM price levels. However, because both waterfall and auction run in parallel, you might be checking some waterfall entries unnecessarily as there might be a winning bid that is higher than the remaining waterfall entries.

Incorrect Integration Method (avoid)

Avoid having fewer than 3 price floors for waterfall demand sources, setting the bid as the first demand source in the waterfall or using CPM averages for other demand sources.

The above integration has the following negative results:

  • If the auction can be filled by bidding, other demand sources are not called. This can result in revenue loss as waterfall demand sources might be able to pay higher CPMs for some impression opportunities.
  • Demand sources are classified based on one average CPM value per demand source. This also has a negative revenue impact since a demand source average does not accurately reflect the price it might have paid for that impression opportunity.
  • A demand source might decide to run a temporary campaign with higher prices for specific impressions and being positioned in the waterfall based on historical average CPM may not allow the demand source to see higher-value impressions that are filled higher up in the waterfall. A better way of using demand sources within a waterfall is by having granular price floors as per above model.
  • In general, the incorrect integration example does not maximize publisher revenue and does not reflect the benefits of bidding.