So, ad exchanges are implementing real-time impression-level bidding, as opposed to traditional impression-level auctions based on predefined rules. Mike explains the distinctions, Cogblog discusses implications.
This sounds pretty expensive to implement vs. auctioning based on predefined rules. First, you’ve got to make a decision about every impression. If you’re using real-time bidding, and you’re buying one impression out of a hundred, it’s got to pay the cost of the ninety-nine other decisions not to buy.
Next – someone correct me if I’m wrong, but I think you’ve got to have as close to real-time reporting as possible. There’s not much point making decisions in real time if the info you base them on only gets updated every few hours. Real-time reporting at scale is neither easy nor cheap.
Finally, your models have got to account for the data that can’t arrive in real-time, or you’re going to put your efficiency gains at risk. For instance, click and impression fraud is generally filtered out by the exchange after the fact, but before your reporting’s updated. CPA offer conversions take time to trickle in- forms can’t be filled out instantaneously.
Add all of the above up, and you may be wishing you stuck with your predefined rule sets.