From Waterfall to Bidding Everything you Need to Know - Alasdair Pressney, Chartboost.

[Music] [Music] [Music] I believe we have a talk about how looking to 2024 but it's with ch boost uh CH boo longtime supporters of Pocket Gamer connect so we're very pleased to Welcome to the stage Alistair prne is that you out there Alistair come up to the stage Round of Applause so uh my name is Alistair presy I'm with chart boost and I'm aior senior

product manager for publisher products and I focus on chart Bo mediation but uh in addition to that work on ever initiative as well uh I'm here to talk about the transition from waterfall to bit uh the pros and cons of each uh what's different about them and what the future may hold so um see agend up let's start with what waterfall looks like so um in a waterfall uh what happens is a mediation platform which would be us requests ads from modation sdks one at a time so you can see in this visual here request to a placement which is a location inside an app where ADS are shown and then you can see this you know list of what's called line items in in a waterfall and those basically represent different price points in mediation and the way a waterfall works is we go down the list in order of price so we go to the first provider and we say hey do you have an ad they say yes or no and then we go to the second provider hey do you have an ad yes or no and we keep going

down that list until we get to a point where somebody says yes at that point we will show their ad um so what are the pros and cons of waterfall so um the biggest thing that Publishers like about a waterfall is transparency over the price you have all these different line items and for each of those line items you can see how many impressions are delivered what the fill rate is how many you know uh what the render rate was the CPM the revenue everything is right there and you get an entire breakdown of what your uh your Revenue looks like inside your supply by price and that's great for Publishers there's some issues though with waterfall some things that are you know technical challenges that the the industry needs to address the biggest one is latency and the reason latency is an issue is because of what I just described we are going one by one into each line items saying hey do you have an ad yes or no next one yes or no each time we do that we're hanging a server and it's a round trip we go all the way to that server and all the way back and those add up

over time so uh I think for with ch boost mediation our time out is around half a second but for waterfalls sometimes these waterfalls can have up to 70 line items in there so you can imagine this really adds up that could be up to you know 35 seconds of lency before you get request in which an ad is actually available and so Publishers uh have a challenge to maximize the number of Impressions they show per session uh we call that impal you know the uh you know number of Impressions per day active user tends to be a little bit lower when you're a waterfall um a part of all those round trips and latency is also cost and inefficiencies in the system right so um like any other system if you have higher costs those costs get passed on through the ecosystem as well and so that doesn't change when we're talking about waterfall you know some of the shared by Publishers here you might not be getting the best price just because of the INE involved and the third thing is there's a lot of active maintenance required for waterfalls I met a lot of Publishers today who best the waterfall I've seen

some really impressive systems where publish different waterfalls them they'll bucket them by country they bucket those countries by Price sometimes they have Advan ways of doing the pricing mechanisms really impressive stuff but all that takes effort so what is bidding in bidding what happens is we request an add to a placement and simultaneously all the biders respond at once and EMB bidding the highest partner win so we get the highest price uh straight away without having to do all that back and forth what are the pros and cons of bidding so the of course right instead of having multiple requests back and forth there's just one uh the other really good thing about bidding is it's a standard system for buying and selling traffic so bidding is based off of a spec that's uh designed called the open rtb uh open Real Time

uh and it's a standard way of transacting ads in uh which means that more work with bidding than they do with traditional waterfalls and mobile apps uh there's several dsps out there that are maybe not mobile specific but maybe serve to you know desktop or web and those biders get access to uh your inventory app inventory through bidding because it is more standardized and interop uh and a big Pro is it could be fully automated you don't have to manage long lines of waterfalls you set up a single line and you get the best price you can however the con is you don't get the breakout of price uh in specific line items everything is kind of Consolidated into average figures and numbers and so you have less control visibility over your price and Publishers don't like that so the reality is a little different from what I just showed you the reality is Publishers do both they

have uh bidding line items and they combine that with a waterfall way that works at chart boost mediation is we will request a bid and we will take that highest bid and then we will slot it into its appropriate place in the waterfall so for example the winning bid is $25 that means it would go to the Top If the winning bid were $12 which in this case it isn't it would go six or seven slots down so what happens is when you're bidding you inherit some of the latency issues in a waterfall but you could also have an opportunity to show the highest price and kind of skip that latency issue if that is the winning bid at that price so most Publishers you know tend to like this approach because they get the best of both worlds but again you are inheriting the latency issues uh that are inherent in a waterfall structure so something that's really interesting something we tried to test with a publisher recently was what happens if you try to use a waterfall

but specify the price ahead of time so what they were what the publisher was trying to do here was say hey I know there's latency issues I don't want to go line item by line item and figure out what the best price is what I want to do instead is I want to manage a waterfall I want to see the price but I don't want to have latency and so what this publisher did was really interesting all Publishers or most Publishers nowadays they have an understanding of how valuable their users are like the LTV of their users uh the expected return they're going to get um or they can look at previous you know U how those users won are received ads in the past and they can use drive you know on how they might receive ads in the future so for example was shown an ad at a $25 CPM in the past maybe it's likely they'll have a ad in the future so this publisher did exactly that they said hey we've seen this user at $25 so instead of going through the entire waterfall instead

what we're going to do is we're going to say hey since we've seen this user at $25 we're going to channel them directly to that $25 line item and only that $25 line item or in this case in this example in the visual here you see $17 so you know same mechanism at $17 and so what we saw was quite interesting in this test more Impressions per daily active user low time went way down the load rate went up because you know it doesn't take as long to load an ad an ARP went up so shown effici than just calling a the CPM the CPM did go down is because we were for user it that to the next one the reason for that was because we didn't really have a mechanism to go to the next line in the waterfall thank you

so yeah okay so really interesting results um waterfalls can be useful but to an extent the the issue with this though is it requires Publishers to build an analytics and segmentation engine that drives the price and that's also a lot of effort so where are we headed I think we're headed to a world where Publishers invest further in bidding but do so in a way that I just described where they Define the price of a user but put it through a bidding mechanism so that you have multiple providers instead of just one provider that respond to an ad I also think that these player analytics and segmentation engines might not come from the publisher but they might come from the platforms you already work with after all they already know about the RASS of you know users when they're buying traffic so if you're working with a mediator who is also your demand provider they could use that same technology to drive price point information on the supply side so what's good about

this well you get a price for every user but you get the right price for every user and you don't have latency and you're the one who's defining the price so you know what that price is so you get the best of both worlds and you don't have to manage a waterfall anymore so I think this is the first prediction I think if bidding is able to solve for pricing transparency control I think we're going to see a lot more adoption bidding and we're going to see some technologies in the next year or two that are going to try and solve this problem the second prediction is a little more hidden though and it it refers to the what I mentioned earlier about interoperability if you remember I said dsps before could come from the web space they could you know they could be mobile focused but basically they're all buying and selling through a standardized framework and I think that's going to have some benefits for Publishers in the creative sphere so before I explain this I'm going to explain something that happened about 5 years ago so how many of you in the room are familiar with viewability at sdks in the OM

SDK we got some hands in the back uh those are my colleagues that's that's that's that's a je I I'll explain it so in the brand World brand buyers really care about whether their ads are seen by a user or not and to the to what extent are they seen and so what happened about five years ago is we had a bunch of viewability vendors each with their own SDK and each of those sdks had their own way of measuring viewability and so Publishers who wanted brand demand had to integrate all those various providers because some Brands work with one provider others worked with another provider what that resulted in was technical redundancy so you have multiple sdks that do the same thing what does that sound like well to me it sounds like rendering if you think about the way that your monetization stack works today you have a mediation platform that manages multiple ads sdks and each of those ads sdks has their own rendering engine the creatives that are shown in

the app are different depending on the provider and Publishers don't have much control over the creatives I think this will take a bit longer than the first prediction but I think in the next five years or so I think we're going to see a lot of consolidation in how creatives are rendered and I think we're going to see a standardized framework supported by bidding and specs developed by the open rtb that allow for Publishers to have a single rendering SDK that works for all providers which would thereby Publishers to simplify their Tex stack and have less sdks and in fact this has already started so you can see in the bottom of the slide there's two links down here uh the the bottom one is for the MDK which is the viewability framework I just described to you and the top link is shark shark is the is the spec that I the IAB is working on to build this framework and the thing I really like about this is it puts Publishers back in control of their creative experience it says hey we have a common way of rendering ads and we can give publishers settings that determine how those demand

providers show their ads which gives a a more unified experience a better experience and an experience you can control thank you very much questions from the audience here here thank you hi um so with you know hybrid versus bidding versus waterfall do you feel like to get the most competition and the highest CPM let's say you need all networks to be biders instead of the hybrid or is it actually like there's communication between the two and there's actually an optimal competition available um so the demand providers who focus on waterfall are usually different from the demand providers that focus on bidding there is an overlap but if you look at the list of company names for

the one or the other um you know I would I would estimate there's about a 20% overlap overall so it's a different mix of demand providers um most of the SDK demand providers that you see today are making that transition from waterfall to bidding and the main reason for that is the efficiency reasons that I called out and if you think about a waterfall some providers may not get access to the full you know full list of users that an app has well they want access to those users right so they're making that transition for for their own reasons as well so um the industry is still you know there's a lot of inertia in this change too like I said Publishers really like price controls and also on the demand side they're used to being uh you know to bidding or not bidding but you know showing their demand into a waterfall so they have to make some changes in their end too but I do expect most of your providers in the future are going to be bids we've already seen some significant changes from you know key providers like Google in the past year so where they've you know shut down their waterfall side and they're they're really starting to ramp up their bidding side that's interesting thank you do we have any

more questions well we got alist for a few minutes actually so if we've got any uh any questions from the audience uh so tell us tell me a little bit about what is you hoping to get from here at Pocket Gamer connects are you looking to meet Publishers basically is that your ideal meeting in it we are very excited to meet Publishers who are interested in working with chart boost uh as our ads SDK or our mediation SDK and I think we also have someone from from our DSP team here in the audience so if you're interested working with us on the UA side too we're interested in chatting with you there that's great have you seen any of the other panels so far this afternoon on the monetization track here at I've been so busy with meetings I hopefully tomorrow yeah absolutely uh well look thank you very much and we'll have a round of applause for Alistair thank you thank you