Exchange Bidding vs RTB: A Detailed Comparison

Until recently, Google dominated the RTB landscape and took major advantages of the premium position that it had. They selected the very best inventory for themselves because the same was concealed from every other platform. The advent of Header Bidding has put an end to the umpteenth amount of advantage that Google initially received, and made every bid in the auction, available to everyone. This allows publishers to maximize revenue by allowing multiple exchanges to compete equally in a unified auction, where each publisher bids, with the same being visible to everyone, and the highest bid wins. In order to retain its dominance, Google launched Exchange bidding– a technology similar to header bidding which is closely integrated with the DFP ad server and assist publishers in superior monetization. In this article, we will take a closer look at these two technologies- Exchange bidding and RTB. 

Benefits: Exchange Bidding vs RTB

The one major benefit of exchange bidding certainly is that it has minimized the bias that gave Google excessive profits and laid out all the platforms and buyers on a same, equal level to compete with each other’s bids. This comes as a direct consequence of the widespread adaption of header bidding technology. This resulted in higher revenue for the publishers and this can be considered the primary benefit for publishers who have switched to exchange bidding. 

Ad Networks List: Exchange Bidding vs RTB

Exchange Bidding has 12 platforms that it has partnered with which includes MobFox, Rhythmone and Sovrn are regionally restricted to Americas and Europe only, with COMET works only in North America, and AerServ working in Americas only. Other than that, they have Index Exchange, OpenX, Rubicon Project, Smaato and TripleLift. In a real-time platform, there are a number of buyers who are connected with the supply side and make bids. 



CPM Rates: Exchange Bidding vs RTB

The CPM in open Auctions, like exchange bidding, is decided by the price the buyer is willing to pay and the number of buyers there are. The more the demand is, the higher is the hike on price and the buyers and willing to pay much more than they would regularly. If it is the first look type, the buyers pay quite a premium price but the fill rates decrease. However, if it is the regular type, the prices are double. RTB works on an auction model, i.e. you set the max bid that you are willing to pay for the placement and win impressions at $0.01 more than the next highest bidder.

Working Process: Exchange Bidding vs RTB 

RTB, not such a complex process, begins when a user visits a website, like a typical, regular transaction. The visit triggers a bid request that may contain various types of data, like the user’s demographic information, history, location and more. The request moves from the publisher to an ad exchange, which puts that and the other data before multiple advertisers who automatically submit bids, on each ad impression quickly to place their ads. The same goes to the highest bidder and their ad is served on the page. Exchange Bidding, though is slightly more complicated, where, an ad request may be sent to DFP making use of Google Publisher Tags or the Google Mobile Ads SDK and with the same, information about the user or the user’s data is sent to DFP. Making use of the information that is provided, DFP labels all eligible line items signed in the DFP ad server and selects the best possible line item to compete via dynamic allocation in the unified auction. Prior to that, DFP sends a bid request to targeted yield partners, who process their own auction and return their most competitive bid to DFP, who then hosts a unified auction to then select a winner.


Conclusion

While both the inventories have their own processes to find out the most competitive bids, and their own pros and cons, as listed above. While Exchange Bidding, is relatively newer to the show, RTB has existed for longer. Nevertheless, both of these have set a rather high benchmark. RTB is more like an umbrella that supports both header bidding and exchange bidding since both of them utilizes RTB technology. 

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