Are unified auctions right for your monetization strategy?
Insights & Best Practices
September 14, 2022
Choosing marketing automation is like walking down the drinks aisle at the supermarket. Experienced marketers know that while every ad network and DSP promises automation, the flavors can vary wildly — less "Coke or Pepsi?" more "Coke Cherry, Vanilla, Cherry-Vanilla, Orange, or Dreamworld?" (Dreamworld is for those who have ever wondered how the surreal, the imaginary, and the otherworldy might taste).
Ahem, let's just focus on mediation platforms.
A mediation platform is software that helps an app choose which ad to show and when. One of the original flavors of mediation technology is a setup called a waterfall. However, over the past few years a new taste has emerged that many publishers have begun to sample: unified auctions.
What's the difference between the two? Why do waterfalls continue to flow? How delicious is the newer technology? Most importantly, which should you choose?
To explain unified auctions, it's wise to start with what preceded it.
What is a waterfall?
In the beginning, there were waterfalls. In the early days of mobile advertising when single ad networks didnt always have enough inventory, the waterfall was created as a simple, clever solution. Publishers needed a way to access multiple networks to ensure they could acquire fill for every ad slot. A waterfall, in its most basic form, simply goes down a list. If one network doesn't have inventory to offer, the waterfall moves on to the next network on the list.
Over time, waterfalls have improved and become more complex, but have also developed a few drawbacks. In an ad marketplace where performance can change daily, a waterfall requires constant maintenance and tweaking. It also requires most publishers to figure out their own analytics setup, which leads to data being drawn in from dozens of different networks. And because waterfalls are sequential, they can be slow to fill the ad slots offered.
What is a unified auction?
Then along came unified auctions. Like waterfalls, unified auctions started with a simple premise: rather than prioritizing specific ad networks, auction requests are sent to every network simultaneously for real time bidding (RTB) and the best bid wins.
This idea offers several advantages. Fill rates increase because the entire auction takes place instantly. Where waterfalls prefer specific networks, resulting in users seeing the same ads over and over, an auction offers more ad diversity. By allowing auctions to elevate the best offer, publishers can forego the constant tweaks to network order based on recent performance. Analytics are also easier. (For more detail, check out the benefits of unified auctions.)
This sounds familiar
The concept of unified auctions originated on the web as header bidding. Check out this brief history of header biddings evolution to mobile in-app.
Why do some publishers still use waterfalls?
Although unified auctions seem like a slam dunk, many publishers still prefer to use waterfalls. The reason why is interesting and nuanced. Despite all of its upside, the technology behind automating unified auctions is far more complex than a waterfall. While some publishers find that unified auctions work perfectly for their needs, others — often the largest publishers — prefer to maintain control by continuing to manually refine and improve their waterfalls.
Waterfalls haven't stagnated, by the way. They've evolved into a hybrid technology capable of mixing in unified auctions. Some publishers run their auctions simultaneously with their waterfall and choose the best result. Others set auctions as line-items within the waterfall — for example, setting a preferred network or direct sale as the first item on the waterfall and then a unified auction second.
This isn't an adversarial environment. Mediation platforms that offer unified auction technology aren't necessarily opposed to waterfalls. For example, Chartboost Mediation uses unified auction technology and plays well with waterfalls.
Standards such as app-ads.txt — which can be instantly vetted by tools such as Chartboost's App-ads.txt Verifier — help ensure transparent, fraud-free transactions no matter which mediation type you choose by allowing advertisers to vet legitimate publisher ad traffic.
The future of unified auctions
In the end, all publishers will likely eventually shift to a pure unified auction model. In fact, 70% of all publishers use unified auctions today, with the remaining 30 percent still opting for waterfalls.
This preference makes sense. At this point, waterfalls have mostly matured. Unified auctions, on the other hand, present a new, fast-moving option with tons of upside that is rapidly improving on two particular fronts:
- Strides are constantly made in the underlying machine learning automation. The mobile ad industry is going through a period of consolidation and increased coordination, resulting in faster, more reliable auctions.
- Unified auctions are bringing together companies that did not previously do so. Look no further than Chartboost partnering with multiple new auction partners, including Google.
In parallel, the technology under the hood of Chartboost Mediation has come a long way itself since its inception three years ago. Chartboost continues to release new updates that iterate and improve upon its logic as well as add major new bidding partners. Even greater advancements are in the works, which will be revealed in the months ahead.
So while the future is bright for unified auctions, either form of mediation continues to be viable. Depending on what you value most — control, speed, perhaps a little of both — it's up to you to decide which is the right choice for your situation.
If you're interested in tapping into the potential of unified auctions, bringing greater stability to your waterfall, or figuring out the right mix for your games, we can help. Start by learning more about your monetization options, or if you're ready to give unified auctions a go, sign up now.