Bid Stream – Everything You Need to Know

Updated on: December 14, 2023
What is bid stream and why it's time for publishers to leverage it?

According to eMarketer, US advertisers will spend $31.1 billion on mobile location-targeted advertising this year. Wondering how mobile targeted ads and bid stream are connected? Worry not, we’re going to establish a relationship between bid stream and targeted advertising in a bit. 

Over the past few years, the programmatic advertising industry has seen a disruption in the way publishers share the audience data with the buyers to enable them to reach the target audience. In order to display relevant ads at the right time, cookies were the source for publishers to store users’ information and pass them to the buyers. 

But, with the browsers like Safari blocking the cookies by default, and Chrome announcing its’ plan to phase out the support for the third-party cookies in two years, advertisers are looking for opportunities to reach the right audience without cookies.

While we know how cookies help to target ads to users, some of us might not be aware of the bid stream consisting of Cookie IDs along with the other parameters such as device information, etc. Got a hint of why we added the statistics in the first place?

To understand what bid stream consists of and how subtracting cookies will affect real-time auctions, let’s take a deep dive into it.

What is Bid Stream?

With thousands or millions of website visitors every month, a publisher processes and stores a huge volume of audience information (non-PII) in their database. The set of users’ data points are sometimes provided (in the form of cookies or cookie IDs) to the SSPs that further pass it to the DSPs. More often than not, the data is passed via the bid request stream — known as ‘bid stream’. 

Even if the demand partner doesn’t win the impression, bid stream data remains stored in their database for future reference. So, what kind of data is sent via the bid stream? Besides cookies or cookie IDs, a publisher often sends the following key data points of a user to the SSPs or DSPs:

  • Demographics, 
  • Device (Type, screen size, CPU speed, orientation, OS, connection type, carrier),
  • Site (publishers’ URL or app name, ad slot position),
  • Location (IP address, ZIP code, latitude/longitude), etc.

What Can You Do With Bid Stream Data?

As you have guessed, with the help of a bid stream, publishers can:

However, without cookies, will a bid stream be helpful for the audience targeting? Of course. On both sides, with or without cookies, the bid stream will help to target the right audience. 

How? Let us explain.

A cookie-less bid stream will make it difficult to identify users and target them based on interests, demographics, and browsing behavior. After all, third-party cookies are used to build user profiles so that relevant ads can be shown to the users at the right time. 

But what’s interesting is that publishers will still hold the power of contextual advertising which doesn’t directly get affected by cookie IDs or other identifiers.

 “This is not a return of contextual targeting, it’s a reminder. The new tools enable us to do that overlay, and we’re reminded why contextual was a good idea.” 

– David L Smith, Founder, and CEO, Mediasmith.

With a cookie-less future, many advertisers are expecting a resurgence of bid stream data from the sellers. Looking at the current trends, many ad-tech vendors including LiveRamp and DataXu have started providing deterministic IDs via bid stream in an effort to increase the ad targeting capabilities of publishers and advertisers. The difference is these deterministic IDs are created with the help of first-party data (CRM) and offline data, not just cookies. So, they can exist without cookies as well. 

Besides, publishers can even provide information related to the ad viewability and brand safety parameters as per an announcement of the new protocol by IAB. But doesn’t the bid stream violate user privacy? No, until the data collected is non-PII (first-party data) and has been shared after taking users’ consent. 

Sidenote: If you are attracting children, then you shouldn’t run interest-based ads at all. Here’s why COPPA.

Bid Stream Pitfalls

For a media buyer in an open marketplace (buying impressions via open auctions), bid stream data is necessary to bid and buy impressions. When it comes to PMPs or guaranteed deals, buyers can bid based on the flag (deal ids), the same isn’t possible for open auctions. Though bid stream plays a significant role in programmatic auctions, it has its drawbacks.

a. Lack of accuracy:  

Advertisers use to pay more for the location data of a user and it is one of the most vulnerable and manipulated data. According to a report by Forensiq, 80% of the location data from the bid stream were inaccurate in 2018.

b. Unconsented use cases: 

Also, some DSPs, DMPs, or data providers take advantage of bid stream data to create their identity graphs that are prohibited to do without publishers’ consent.

c. Declaration Fraud:

Apparently, buyers rely on the information sent by the sellers and exchanges to bid. There are instances where exchanges unintentionally sent misleading information about the ad unit size to lure buyers to bid higher ad prices. Bid stream data can be manipulated by anyone from the sell-side of the bidding process, be it SSP or an exchange/network. As a publisher, it’s always better to keep an eye on the bid requests and cross-verify it with the specifications/page context. 

c. Siphoning IDs 

A malicious DSP or data provider can extract audience information from the bid stream and then find the same segment of the audience on cheaper web properties. This is yet another reason to continually optimize your ad stack and check the performance of bidder partners. 

Bid Stream has several vulnerabilities. If not taken carefully, they can diminish the publishers’ revenue as well as advertisers’ ROI. To prevent such fraud activities, publishers are recommended to have ads.txt that lists down the sellers or other adtech partners they are working with, assuring the advertisers brand safety. Resellers can be added to the ads.txt file if they provide value. 

What’s Next?

The key is to understand what data to include in the bid requests and with whom to share without violating users’ privacy. And, it’s important to update your wrapper, RTB protocol, video player, etc. to ensure you are not allowing fraudsters to use any loopholes from the older versions. Have any more questions about the bid stream? Let us know in the comments.

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