Bid caching is not acceptable, where the buyer is the loser and the exchange is the big winner
In reaction to the Index Exchange bid caching, OpenX did a statement about the “industry concern about Index Exchange’s decision to deploy a systematic program of non-transparent bid manipulation through bid caching without communicating it to brands, agencies, DSPs or publishers.”
Index Exchange was reusing bids in one auction, in a future auction, winning market share in consequence. It’s called bid caching.
OpenX says “bid caching is not acceptable. It hurts brands, agencies, and DSPs because it disregards their explicit real-time decisions, increases the prices they pay and creates significant brand safety risks.”
Drew Bradstock, SVP of product at Index Exchange, said Index Exchange “didn’t think it was an issue with buyers. We were so surprised. We thought this was an industry practice.”
OpenX says that “have never even considered, let alone conducted, bid caching. Indeed, OpenX have never been aware of any other legitimate exchange conducting bid caching. This is not just about transparency, it is about market and company integrity.”
Telaria also reacted yesterday: “We want to be unequivocal in our stance on this issue — Telaria does not, in any way, employ any tactics behind the scenes in order to game the system.”
Telaria says that the big loser with bid caching is the buyer, who is likely overpaying for an impression. The bigger winner is the exchange as it increases the likelihood that they will win multiple auctions.