What is the Bid Caching Controversy?

Ever heard of bid caching? It’s a technique that extends the life of bids in programmatic ad auctions, as Digiday describes it, which loosely translates into an effort where unsold inventory is shifted to other auctions.

OKO Digital Limited defines it as “the process of keeping a bid when a buyer fails to win an impression and then applying that bid to a later ad-request.” Its purpose is to reduce latency and serve ads faster. However, it can also increase CPMs and may result in buyers getting a different impression than they thought they were buying.

For advertisers, it lacks transparency, but for platforms, it facilitates the sale of previously unsold inventory. Some say it is a ‘bait and switch,’ while others call it an ‘innovation.’ It has been halted almost as fast as it was implemented, but not before a heated controversy erupted.

Industry Background

In the early days of programmatic, inventory was more siloed with private marketplaces offering unique, specialized inventory. Now marketplaces have opened up and more freely allow their inventory to be sold across multiple marketplace platforms. There is more inventory ubiquity and more pressure to differentiate.

As Digiday explains, “tweaking auction dynamics to gain a competitive...

Read the full article on the Videa blog.