The bidstream, also known as bid requests or bid opportunities, is a fundamental component of programmatic advertising. It refers to the stream of data generated during the real-time bidding (RTB) auction process, where advertisers and their demand-side platforms (DSPs) submit bids to purchase ad impressions on various ad exchanges and supply-side platforms (SSPs).
Here’s how the bidstream works in programmatic advertising:
- Ad Request: When a user visits a website or mobile app with ad inventory available for sale, an ad request is generated. This request is sent to an ad exchange or SSP, which acts as an intermediary between publishers and advertisers.
- Auction Initiation: The ad exchange or SSP collects information about the ad impression, such as the user’s demographics, browsing behavior, the content of the webpage, and more. This information is included in the bid request to help advertisers decide if they want to bid on the impression.
- Bid Requests: The bid request, which is often in the form of a JSON object, is then sent to multiple DSPs. Each DSP receives these bid requests and processes the data within milliseconds to make a bidding decision.
- Bidding Decision: Within the DSP, the bidding algorithm assesses the ad impression’s value based on the available data, the advertiser’s targeting criteria, and the campaign budget. The DSP decides whether to submit a bid and, if so, at what price.
- Bid Submission: If the DSP decides to bid, it generates a bid response. The bid response includes the bid amount and other parameters, such as the creative to be displayed if the bid wins. This response is sent back to the ad exchange or SSP.
- Auction: The ad exchange or SSP collects all the bid responses from participating DSPs. It evaluates these responses and determines the winning bid based on the highest price.
- Ad Delivery: Once the winning bid is determined, the ad impression is delivered to the winning DSP. The winning DSP’s ad is then displayed to the user in real-time.
- User Interaction: The user may or may not interact with the ad. If an interaction occurs (e.g., a click or view), the data is collected and used for reporting and optimization.
The bidstream, therefore, represents the flow of data from the initial ad request to the final ad delivery. It allows advertisers to evaluate and bid on ad impressions in real-time, enabling them to reach their target audience with relevant and timely advertising.
Advertisers and DSPs rely on the bidstream to make quick bidding decisions and optimize their ad campaigns. The bidstream is rich with data, and the analysis of bid requests can help advertisers make more informed choices about which impressions to bid on and at what price, making programmatic advertising a highly data-driven and efficient approach to digital advertising. Any degradation in the bloodstream can cause signal loss. For more on signal loss and how it impacts advertisers click here.