In programmatic advertising, bid throttling refers to a technique, which implies limiting bid requests in real-time auctions to reduce operational load and increase the efficiency of online advertising campaigns.
What is Bid Throttling?
In plain words, bid throttling is a technique, designed to reduce wasted effort from inefficient, often duplicated bid requests from bidders in programmatic auctions, which implies a shift from bidding on every ad opportunity available to prioritizing high-value ones.
The main idea behind bid throttling lies in the optimization of a programmatic supply path and reduction of resource overhead, particularly when it comes to latency, in order to improve digital ad campaign performance, hence enabling all parties to achieve better revenue outcomes.
Who Handles Bid Throttling?
Bid throttling or filtering can be handled on all ends, either by an advertiser or DSP, or by a publisher’s ad server, in order to maximize value for all parties involved.
From the technical perspective, this can result in limiting bid requests for certain ad inventory after no bids are received for it N times in a row, bidding based on the potential win rates or simply bidding only on specific, high-performing domains; or deprioritizing resource-hungry, yet poorly-performing bidders in favor of the higher-yield ones, accordingly.
Non-surprisingly, a so-to-speak infrastructure-based approach to bid throttling inevitably implies continuous A/B testing depending on inventory type, page, selected ad formats, and much more, hence involving some type of a server-side solution (either an in-house or a third-party one), which would be able to handle either/both the demand rotation and traffic throttling.
Keys to Effective Bid Throttling
Whereas there’s no unified approach to bid throttling, as experts admit, it’s crucial to remain flexible in terms of a selected filtering strategy, without over-complicating, or being too aggressive with it.
In plain words, this means continuous monitoring of the ongoing partner performance and willingness to calibrate it, i.e. adjust and optimize the applied tactics accordingly, in order to maximize revenue results.