How Exchange Bidding works

Learn the life cycle of an Exchange Bidding request

Each Exchange Bidding interaction between a publisher and their exchange partners is handled by Ad Manager in what is called a “server-to-server” integration. This article describes the life cycle of an ad request targeted by an Exchange Bidding yield group.

The Exchange Bidding process

1. An ad request is triggered and information is passed to the Ad Manager ad server
2. Ad Manager runs a unified auction to determine the best yield
2a. Ad Manager selects the best trafficked line item to compete in the unified auction
2b. Ad Manager sends a bid request to targeted yield partners
2c. Targeted yield partners run their own auction and returns their most competitive bid to Ad Manager
2d. Ad Manager hosts a unified auction and selects a winner
3. A creative or Mediation list is returned to the publisher

1. An ad request is triggered and information is passed to the Ad Manager ad server

An ad request can be sent to Ad Manager using Google Publisher Tags or the Google Mobile Ads SDK. Along with each request, information about the user, device and targeting is passed to Ad Manager. Learn more

Support for video and native inventory is not yet available.

2. Ad Manager runs a unified auction to determine the best yield

The steps below are completed synchronously on the server-side as part of the Ad Manager ad selection process.

2a. Ad Manager selects the best trafficked line item to compete in the unified auction

Using targeting and delivery pacing information, Ad Manager catalogs all eligible line items booked in the Ad Manager ad server and selects the best line item to compete via dynamic allocation in the unified auction. Learn more

2b. Ad Manager sends a bid request to targeted yield partners

Ad Manager uses yield groups to identify the list of exchanges to compete in the unified auction. Yield groups contain targeting similar to line items and include a combination of Ad Exchange, third-party exchanges and/or Mediation ad networks. For each Exchange Bidding yield partner assigned to an eligible yield group, Ad Manager sends a bid request to collect their highest bids.

Requests marked as child-directed in compliance with the Children's Online Privacy Protection Act (COPPA) are not sent to Exchange Bidding yield partners.

What happens if multiple yield groups are eligible for the same request?

The yield partner lists from each eligible yield group are combined into a single list, so Ad Manager sends each partner only one bid request. If the same yield partner appears in more than one eligible yield group, only one bid request will be sent to the yield partner.

What happens if requested ad sizes don't match the yield group targeting?

In this case, the third-party yield group partners, or “buyers,” will be able to bid on whatever sizes overlap between the sizes in the publisher’s ad request and the sizes targeted by the yield group. If a separate Ad Exchange line item in Ad Manager targets the sizes that do not match the yield group targeting, Ad Exchange buyers will still be able to bid on those sizes included in both the publisher’s ad request and the Ad Exchange line item.
For example, let’s say a publisher’s ad request contains three sizes — 300x250, 300x600, 300x50. If a yield group targets only the 300x600 and 300x50 sizes, third-party yield group buyers can only bid for those two sizes, and will not be eligible to submit bids for the 300x250 size. If a separate Ad Exchange line item targets all three sizes, Ad Exchange buyers will be able to bid on the 300x250 size in addition to the sizes targeted by the yield group.
Note that requests with multiple sizes are not supported by Mediation for mobile apps.

What information is sent to buyers with each Exchange Bidding request?

Exchange Bidding requests are sent to buyers using a modified version of the Ad Exchange real-time bidding protocol buffer or the OpenRTB protocol buffer. In addition to standard fields from the RTB protocol, exchange bidders also receive the publisher's Ad Manager network code and Ad Manager ad unit code.

How do Ad Exchange or AdSense line items and yield groups compete?

Ad Manager only sends one bid request to Ad Exchange for each unified auction. If both an Ad Exchange line item and a yield group are eligible for the same impression, Ad Manager sends a single request to Ad Exchange. This request follows the code snippet and web property defined in the Ad Exchange line item.
In Delivery Inspector, you might see both a yield group and line item listed as "delivered" to an ad slot if the targeting for both an Ad Exchange line item and yield group matched an ad slot.

 

2c. Targeted yield partners run their own auction and returns their most competitive bid to Ad Manager

Yield partners utilize their own Exchange Bidding integration to receive the bid request from Ad Manager, run an auction according to the information provided in the request, and return their most competitive bid to Ad Manager.

2d. Ad Manager hosts a unified auction and selects a winner

Ad Manager hosts a unified auction, comparing yield partner bids, the Ad Exchange bid and other direct line items via dynamic allocation to ensure that each impression maximizes yield. See “Auction dynamics,” below, for more details.

3. A creative or Mediation list is returned to the publisher

After dynamic allocation and all Exchange Bidding auctions have completed and a winner is selected, the Ad Manager ad server returns the winning asset to the publisher for display.

  • If an Ad Manager line item wins the Ad Manager unified auction, the Ad Manager creative is returned to the publisher.
  • If an exchange bidder or an Ad Exchange buyer wins the Ad Manager unified auction, the buyer’s creative is returned to the publisher.
  • If a Mediation yield partner wins the Ad Manager unified auction, a Mediation list, or “chain,” is returned to the publisher that includes Mediation yield partners with a CPM higher than the highest Ad Exchange or Exchange Bidding yield partner bid. The publisher’s mobile app will then call each partner in the list in order for a creative to display. Learn more about Mediation for mobile apps
If the default CPM for a Mediation yield partner is defined as higher than the highest bid from an Exchange Bidding yield partner, the Mediation yield partner will have a first look to fill the impression with no guarantee they will return a bid at the default CPM price. Ensure that your default CPM values for Mediation yield partners is set realistically to optimize competition.

Auction dynamics

The real-time bids (RTB) from yield partners compete as part of dynamic allocation in a unified auction. The best Ad Manager line item rate, expected Mediation yields and exchange bids are compared at the same time and the top bid wins the auction. Ad Exchange and yield partners bid once for each impression.

All participants in the unified auction, including Ad Exchange and third-party exchanges, compete equally for each impression on a net basis. Each exchange runs its own auction independently and then submits its bid into the unified auction. Third-party exchange bids do not set the floor price in Ad Exchange's auction.

For example, suppose one Ad Exchange buyer bids $3.00 and another bids $1.00. In this case the Ad Exchange auction clears at $1.00 and the Ad Exchange submits a $1.00 bid into the unified auction. If a third-party exchange bids $2.00 on this impression then it would win the unified auction and pay $2.00, since its $2.00 bid is higher than the Ad Exchange’s $1.00 bid.

Payments

All payments are facilitated by Google and determined by each Exchange Bidding yield partner’s impression delivery volume. Payments are sent to the publisher and requested from the buyer within approximately 30 days of the end of the month. 

How buyers are charged for Exchange Bidding impressions

Buyers bidding through the Ad Exchange continue to pay according to the standard Ad Exchange auction model. When an Exchange Bidding yield group buyer wins the unified auction, the buyer pays the bid price.

How publishers are paid for Exchange Bidding impressions

Publishers are paid according to the terms of their Ad Exchange agreement and Exchange Bidding contract addendum. Payments for Exchange Bidding impressions are made net of Google's revenue share. The publisher’s bill from Google will include an itemized list, displaying revenue from Ad Exchange and third-party exchanges separately. Publishers can then use the yield group dimensions and metrics in Ad Manager reporting to itemize revenue per exchange or yield group. 

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