In the ever-evolving world of programmatic advertising, the term "bid caching" has garnered a mix of curiosity, but also skepticism among publishers. Misunderstandings and misconceptions have shrouded this technique, leading to reluctance in its adoption. In this article, we will try to demystify bid caching within the context of Prebid and help publishers shed light on what this technique truly entails, as well as explore its benefits and drawbacks.
Let’s first start by defining what bid caching is exactly within programmatic advertising and in the context of Prebid: bid caching is a practice where the bid response for an ad impression is stored or "cached" for a short period. This cached bid can be reused for subsequent ad requests that occur within a specific timeframe, reducing the need to fetch new bids for every impression. In Prebid’s context, bid caching serves as a mechanism to improve ad delivery efficiency and reduce the loading time from SSPs: if an ad request is made while a relevant bid response is already cached, this cached bid can be served instead of triggering a new auction.
Not to be confused as bid manipulation or favoritism of any kind, bid caching is designed as a tool to optimise ad operations by significantly reducing the delays and loading times around ad delivery. By reducing the strain on the SSPs, this technique reduces operational costs for publishers as well as loading times, improving the general user experience
SPO, or Supply Path Optimisation, was invented by Bryan O’Kelley (AppNexus’ CEO at the time) as a way to optimise the digital advertising industry as a whole. He found that, with the multiplication of calls made to DSPs, buyers would often end up receiving a consequential amount of bid requests that were essentially identical: same ad unit, same page, same user. This duplication of ad requests would, in turn, generate increased and obviously superfluous server costs for advertisers receiving these duplicate bid requests.
As a way to counter this duplication, bid caching was created in order to reduce loading times in latency-prone environments (such as users on mobile devices). Publishers started using this method to streamline their advertising stack and optimise their monetisation process. However, in doing so, it also seems that certain advertisers were unknowingly not getting the impressions they thought they were as their creatives were sometimes rendered on a different slot than the one they had initially placed a bid upon.
If a DSP’s bid comes in second place on the homepage and is then cached, only to later be printed on the next page, advertisers could easily argue that the auction is biased to their disadvantage. And it’s quite hard to argue that logic since their initial bid was not made with the same characteristics as during the initial auction. In the present case, the result for the publisher would be cashing in on two bids made for the homepage, while one of those bids would actually be printed on an entirely different page. This example seems to be where most of the the transparency issues around bid caching stem from, discouraging both publishers and advertisers of using this technique.
Bid caching has however come a long way since, and is now actually directly included in Prebid. Since Prebid fully controls the caching parameters, the transparency concerns that previously existed around bid caching are addressed by the open-source code. With this technique now equipped with the structure that many saw lacking a few years ago, monetisation teams can implement bid caching on their ad stack without facing the risk of being accused of unfairly profiting from cached bids.
In the current version of Prebid, bid caching can be activated as long as the bid that came in second:
integrating bid caching, which is done by setting a configuration to “TRUE” within Prebid, may not be the most challenging of tasks in terms of implementations.However, it will require careful configuration if you decide to set bid caching up outside of Prebid.
In any case, keep in mind that frequent monitoring of your stack metrics is necessary to make sure your bid caching is not unfairly treating certain bidders (more on that below). Also, publishers should note that this monitoring part of their job can also easily be filled by setting up an automated alert system.
As we’ve just mentioned above as well as when retracing its history, bid caching has faced certain transparency issues around the fairness of this practice in regard to advertisers.
Keeping a bid cached to serve for an auction it didn’t respond to may obscure the real-time dynamics of the ad auction just as much as it may leave advertisers disadvantaged and paying impressions that they would have valued differently. However, this is exactly the situation that led Prebid to implement much stricter regulations around bid caching, sweeping aside all transparency concerns. In today’s Prebid environment, the global rules set for all programmatic partners prevent these sorts of situations from happening.
By significantly reducing the time to deliver ads, bid caching has the potential to improve page loading times and the general user experienceNo need to wait for new bids with cached bids already available and ready to render, which helps with better loading times and improves the interaction of your audience with your website.
Serving cached bids will mechanically reduce the load that publishers put on SSPs. This lower load on bidders results in reduced infrastructure & personnel costs, helping publishers maintain their cost of operation for their monetisation as low as they can.
By just checking a box inside Prebid and configuring their caching properly, publishers usually generate a 5% uplift in terms of revenue without any additional action required (5% uplift is considered only applying the 2nd highest bid).
While bid caching may have gotten a bad reputation, this is mostly due to the actions of a limited few publishers or bidders that implemented their caching in a hidden manner. This precipitation put certain advertisers in a situation exactly opposite to the reason why Prebid was initially created: an unfair, biased auction leading them to often over-pay for an impression they didn’t ask for.
These concerns have recently been taken care of, as Prebid now includes all the safety measures required to ensure that bid caching can be done by publishers without taking the risk of causing prejudice to the interests of bidders or advertisers. As we’ve just detailed, the limitations to this practice defined internally by Prebid are more than enough to ensure that situations such the bid caching controversy don’t happen again.
Our main piece of advice for publishers: you definitely should implement bid caching as, in our experience with some of Europe’s leading publishers, it usually generates a 5% revenue uplift with little to no effort. If you’re unsure about how to proceed or would like some guidance through your monetisation efforts, feel free to reach out and one of our programmatic experts will get back to you!
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