The rise of header bidding and other programmatic trends to watch 👀

Last year, Jampp went 100% programmatic for both User Acquisition and Retargeting to provide our clients with improved technology and transparency. Agnostic across the board, Jampp works with a number of select supply partners to secure higher visibility and control over campaign performance. With our newest series, Jampp’s Supply Takeover, we hope to shed some light on the technologies that make our partners a great fit, as well as insights about existing challenges and upcoming trends in programmatic.

Supply Takeover #1 — Meet Bidmachine

In this first edition, we interviewed BidMachine’s Fernando Granata, Demand Relationship Manager, and Alberto Nutricati, Head of Account Management.

Tell us a little about BidMachine

BidMachine is an ad exchange powered by in-app header bidding. Together with Appodeal, Bidmachine is a part of a comprehensive suite of mobile app scaling solutions that we offer at Stack, our parent company.

While Appodeal’s ad mediation is meant for those seeking an all-in-one ad monetization platform, BidMachine’s focus on programmatic advertising makes it ideal for publishers that want to easily add ad exchange demands to their existing setup.

This same year, BidMachine rolled out an open-source code for those publishers who wish to explore ad exchange technology on their own. We plan to create an open-source community for everyone who’s interested in moving in this direction. We believe that developers should have an open access to code, learn from it and ultimately be free to manage bidding technologies.

What sets you apart from other ad exchanges? What are some of your main differentiators?

We envision BidMachine as a powerful ad monetization source for publishers who might have never thought of ad exchanges as a legitimate way to enrich their monetization. BidMachine’s SDK is specifically designed to be easily adopted and integrated by publishers. We understand that difficult integration processes and incompatible codes are the main obstacles for publishers, so we built our SDK to be as light and efficient as possible. We also focused on transparency tools, which are equally important for auctions to be successful. Through us, publishers get access to premium demand from a variety of cutting-edge, top-performing DSPs like Jampp, and level up their apps with quality ads.

At BidMachine, innovation is in our DNA. When we were still a part of Appodeal, we were among the first in the market to introduce a live prototype of in-app header bidding technology, which is now thriving.

Since you bring it up 😉, let’s talk header bidding. How do you think it will change the future of the app industry?

We think the benefits of in-app bidding in terms of transparency standards and fairer auction dynamics are evident.

Thanks to the industry’s shift to in-app header bidding, we are pleased to see that programmatic DSPs are getting new opportunities to compete fairly in these auctions. Ad demand is becoming increasingly programmatic in nature, and we believe that innovative DSPs like Jampp are in a good position to make considerable progress with more transparency and control than that of ad networks.

How is the industry catching up with this new trend?

The adoption rate of in-app header bidding is steadily growing 📈, and we strive to make it as easy as possible for publishers to access this technology. That is one of the major reasons why we introduced BidMachine as a standalone source, separated from ad mediation.

What’s the most exciting project your team is working on at the moment?

One of the key projects we are working on is an algorithm to improve the bid requests and price floors that BidMachine sends to DSPs. This will allow us to dynamically change the traffic volumes based on the DSPs’ interests.

Additionally, we recently adopted a few transparency tools, such as app-ads.txt, OpenRTB SupplyChain Object, and sellers.json, that greatly contribute to making the programmatic environment more transparent and safe. These last two are actually technical specifications introduced by IAB this summer with the aim of increasing trust in the supply chain. The sellers.json file allows DSPs to verify the app-ads.txt entries provided by the publisher, while SupplyChain Object fully shows the supply path from the publisher to the advertiser with all reseller entities in-between.

App-ads.txt and sellers.json were designed to fight fraud, but they’re still relatively new. Have you seen any challenges or drawbacks in implementing these technologies? How do you think it affects the in-app landscape?

There are certainly drawbacks to any tactics, but we’ve only seen positive effects for app-ads.txt and sellers.json so far. The difficulties are always related to getting everyone on board; otherwise, it’s not effective.

Both app-ads.txt and sellers.json are fairly easy to implement and have been very useful for our DSP partners. We embrace any trend aimed at increasing trust and facilitating auctions between publishers and advertisers.

Do you see any upcoming trends that you are excited about?

We are particularly excited about the development and adoption of the hybrid auction model — a combination of second-price and first-price auctions which secures optimal bidding results. We can already observe that the bid shading strategy is getting traction, which indicates a clear shift towards first-price auction.

Many DSPs were used to buying on second-price auction only, as essentially, you place higher bids in the first-price auction. However, bid shading helps to find the most appropriate bid price to minimize expenses while preserving a good chance of winning anyway. To put it simply, the rise of bid shading helps DSPs to avoid paying too much.

When all players accept the first-price auction model, we believe that transparency levels will be at their all-time high and contribute to higher earnings for both publishers and advertisers.

We are also excited to continue developing an in-house solution to help publishers operate their own exchange without having to invest an overwhelming amount of time and resources. With an in-house exchange (or an open-source solution) the publisher can offer inventory directly to DSPs, cutting out the middleman. Frankly speaking, we think that in-house ad tech is the future of mobile app publishers.

Speaking of trends that advertisers love to hear about, what formats are the top performers at the moment? Does this vary a lot per region? 🌎

Last quarter, we released an In-app Performance Index with Appodeal, showing how various ad formats perform in different regions, as well as their eCPMs across ad networks and ad exchanges. We’ve found that rewarded videos remain a top-performing ad format across all regions, with ads like playables slowly catching up (at least when it comes to the gaming vertical).

Surprisingly, more conventional ad formats like display and native ads are making a solid comeback. A few years ago, it seemed like those formats were doomed, likely to be replaced by newer and more dynamic formats, but we find that they are still very relevant. In fact, we recently reincorporated native ads to our ad format family.

Moving on to a slightly less popular topic, albeit a necessary one: fraud. How has in-app fraud evolved over the past years?

SDK spoofing has become more widespread. To give a little context, with SDK spoofing, fraudsters generate fake installs with stolen data from real devices. It is very important for us to ensure safety for publishers and demand partners, since we understand that the fear of fraud goes both ways. To this end, we have developed internal mechanisms against fraud on both ends.

So how do you fight fraud on your end?

In order to protect publishers, we put forward measures to check creatives and make sure the demand partners are following our advertising policies. We have a select team checking upon SDK integrations to see whether impressions actually took place within an app. Furthermore, if any issues do arise, we work very closely with all our publishers to ensure immediate resolution 👮.

As for protecting our demand partners, we have a dedicated fraud team that investigates suspicious app stats and behaviors, thoroughly checking all apps before activating and making them eligible for demand. We make sure to check whether the app is a COPPA app, whether there are incentivized placements or real money being offered in the app (which we do not allow), whether there are ad placements that lead to forced clicks or actions, and whether the app has any illegal content. Upon SDK integration, we ensure that the impressions really happen and run rendering tests for OpenRTB/API integrations.

How do you choose the publishers you work with? What makes them a good fit for BidMachine (Appodeal)?

We have a thorough selection process to make sure our publishers and our demand partners are well matched. All our publishers receive full integration support to secure that all processes are smooth from the get-go. That is especially important since we plan to start supporting Private Marketplace, which will allow publishers and advertisers to make direct deals. These personalized deals will result in more optimal matches.

More and more of our publishers integrate via SDK, guaranteeing a more compelling performance, less crashes, and more transparency. DSPs prefer to connect with publishers that are SDK-based, since they can check their app-ads.txt and verify the authenticity of traffic.

When it comes to working with DSPs, how do you select your partners?

It is very important for us to partner with companies that have a similar vision when it comes to transparency standards, reputability, and genuine drive. We partner with diverse DSPs to provide publishers with options they can’t normally access with traditional setups. When it comes to technical requirements, we work with DSPs that are technically capable of supporting CPM responses either via API or OpenRTB integrations. Generally, our DSP partners are able to efficiently scale spend, work at high QPS, and have an accurate and transparent tracking system.