Another week, another ad tech controversy -- this time courtesy of Index Exchange and their apparent widespread use of bid caching across display.
What’s bid caching and why should I care?
Put simply, it’s storing a bid that buyers think they’re making for specific inventory and reusing it for a subsequent auction on likely different inventory. It’s thinking you’re buying prime rib, definitely paying for prime rib, but instead getting a frozen pack of peas instead. Digiday wrote this great short explainer. While there may be some arguments in favor of this type of practice in environments where latency is a factor like mobile & video, the fact that this practice came as a surprise to buyers, sellers, and competitors alike is telling.
You bid $20 for a lamp. You don’t win the lamp auction, but I cache your bid -- since you’re bidding on lighting clearly you’re in market for similar things and hey, presto your $20 now wins the auction for a lovely set of scented candles that are on their way to you. The candles would normally cost $10 but 1) the buyer thinks they won the auction and are getting a lamp, 2) the seller is happy to see more revenue, and 3) intermediaries are happy because more money flowing through their platform means more revenue. Doesn’t quite work with lamps and candles. Shouldn’t work with digital inventory either.
So will this blow over too?
So what should I do?
Till next week, when some other symptom of an opaquely constructed ecosystem will inevitably grab our attention and collective outrage.
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