Transaction ID standards clash raises programmatic transparency concerns

The programmatic advertising industry faces mounting pressure over transaction identifier standards as demand-side platforms (DSPs) and supply-side platforms (SSPs) dispute the fundamental architecture of bid request transparency. Recent industry discussions, triggered by technical implementation conflicts, underscore deeper structural issues requiring regulatory attention.

According to a LinkedIn analysis by Brian O'Kelley, Co-Founder and CEO at Scope3, posted on August 29, 2025, the controversy centers on DSPs' desire to optimize bid strategies through predictive algorithms that assess supply path efficiency. "DSPs want to bid on each impression once. Therefore, if publishers generate an unique ID for each impression, then the DSP can do some predictive logic that will assess the likelihood that a given supply path is the shortest/best for this publisher/placement," O'Kelley explained.

The technical dispute emerged from recent changes in Prebid's implementation of transaction ID standards. The IAB Technology Laboratory issued a strong statement on August 27, 2025, declaring that Prebid's modifications "materially violate the OpenRTB specification." According to Anthony Katsur, Chief Executive Officer at IAB Tech Lab, these changes "risk undermining the integrity and consistency of open technical standards that are critical to interoperability across the programmatic ecosystem."

Publishers and SSPs express concerns about DSP optimization potentially reducing bid values and compromising revenue streams. O'Kelley's analysis suggests these stakeholders "believe that this logic will mean that DSPs will bid less, and/or will somehow leak personal information because... they send different data to different SSPs that could be combined back." However, O'Kelley noted uncertainty about the complete technical rationale behind these concerns.

The implementation changes ensure each bidder receives different transaction identifiers, even when participating in identical auction opportunities. This modification eliminates cross-exchange visibility that the OpenRTB specification originally intended to provide. Publishers using Prebid Server integration face particular challenges, as technical documentation indicates the same logic must be implemented server-side due to limited location options for source.tid and ext.tid in Prebid Server requests.

These technical conflicts reflect broader programmatic advertising inefficiencies documented across multiple industry studies. Publishers have deployed bid throttling strategies to manage duplicate requests created by header bidding implementations. According to Sarah Sluis' investigation in AdExchanger, "Programmatic auctions are creating so many carbon copies of themselves, it's threatening to topple the entire structure of programmatic."

The transaction ID controversy occurs amid significant programmatic advertising growth. The latest State of Programmatic Report from Comscore, released January 21, 2025, reveals that 72% of marketers plan to increase programmatic investment in 2025, marking substantial growth from 62% in 2024. However, transparency concerns persist despite this expansion.

O'Kelley's predictions suggest the controversy could accelerate market consolidation and direct relationships. "DSPs will go direct to supply because they can't trust the programmatic supply chain to give them transparent information," he forecasted. His analysis anticipates major platforms developing proprietary solutions, with Trade Desk potentially building prebid adapters and creating "open path" programs, while Amazon might develop complete prebid implementations for comprehensive control.

The regulatory implications appear significant according to O'Kelley's assessment. He predicts the Department of Justice will recognize monopolistic behaviors and implement remedial measures. "And then, getting crazy here, the DOJ will realize that Google doing that is monopolistic and will, as the sole remedy, ban them from having the same transaction ID for every SSP. PROBLEM SOLVED," O'Kelley wrote.

The controversy has generated substantial industry discussion across programmatic advertising channels. Trade publication AdTechRadar reported the changes "potentially remove a widely adopted mechanism for supply deduplication," citing concerns about duplicate bids, wasted spend, and higher costs for advertisers.

Privacy considerations motivated the implementation modifications according to discussions in the Prebid community. Publishers expressed concerns that unified transaction IDs could enable buyers to combine bid requests across different sellers, potentially exposing identifier connections that publishers preferred to keep separate. However, some industry participants questioned the privacy rationale, arguing established data protection mechanisms already address identifier linking concerns.

The timing significance cannot be understated. These changes occur during ongoing discussions about supply path optimization and transparency initiatives across programmatic advertising platforms. The Trade Desk's inclusion in the S&P 500 index on July 18, 2025, demonstrates programmatic advertising's mainstream financial recognition while transparency challenges persist.

Major advertising platforms face increasing scrutiny regarding transparency practices. Google recently enabled full placement reporting for Search Partner Network following decades of advertiser demands for visibility into ad placement locations. According to Google Ads Help documentation, this "highly impactful feature directly addresses advertiser feedback by offering full transparency on where your ads run."

The broader regulatory landscape supports increased oversight requirements. Bipartisan legislation introduced by Senator Mike Lee on March 13, 2025, targets conflicts of interest in the $700 billion advertising ecosystem. The AMERICA Act would prohibit companies with more than $20 billion in annual digital advertising revenue from simultaneously operating multiple supply chain layers.

Industry transparency challenges extend beyond technical standards. According to the ANA Programmatic Media Supply Chain Transparency Report, only 36% of post-transaction programmatic budgets reach valid, viewable, measurable, and non-fraudulent impressions. TAG CEO Mike Zaneis emphasized that marketers face "garbage in, garbage out" transparency without log-level data access across downstream partners.

Microsoft's decision to sunset Xandr DSP by February 28, 2026, removes one of the industry's most transparent platforms. AppNexus, which became part of Microsoft through the 2022 Xandr acquisition, was recognized for providing unprecedented visibility into fee structures and money flows throughout advertising supply chains. Former AppNexus co-founder Brian O'Kelley had positioned the company as a transparency champion, revealing average seller platform charges of just 8.5%.

European regulatory developments demonstrate increasing government intervention in digital advertising practices. Meta and Google announced withdrawals from EU political advertising citing compliance challenges with the Transparency and Targeting of Political Advertising regulation taking effect October 10, 2025. These withdrawals highlight tensions between regulatory requirements and platform operational capabilities.

The IAB Tech Lab announced plans for a dedicated forum to address the transaction ID controversy. Potential solutions might include optional transaction ID scoping, publisher-controlled identifier policies, or enhanced privacy controls within existing frameworks. However, the fundamental coordination challenges between standards bodies and implementation organizations remain unresolved.

The controversy highlights broader programmatic advertising ecosystem challenges in balancing transparency, privacy, and technical standards. As the industry continues expanding, coordination between standards organizations, implementation platforms, and regulatory bodies becomes increasingly critical for sustainable growth.

Market consolidation pressures may intensify if technical standards disputes remain unresolved. O'Kelley's prediction of direct supply relationships reflects advertiser frustration with intermediation complexity. Industry professionals acknowledge that transparent, standardized approaches benefit all participants through reduced friction and improved performance measurement.

The transaction ID controversy represents more than technical disagreement. It embodies fundamental questions about programmatic advertising's future structure, transparency requirements, and regulatory oversight necessity. Resolution requires collaboration among technical standards organizations, implementation platforms, publishers, advertisers, and potentially regulatory authorities.

Timeline

• June 2022: IAB approves Community Extension for per-impression transaction IDs in OpenRTB
• June 2022: Prebid implements initial transaction ID support following OpenRTB specifications
• January 2023: Department of Justice filed antitrust suit against Google over digital advertising conduct
• March 30, 2023: Senator Mike Lee introduced first version of AMERICA Act in 118th Congress
• December 2023: ANA Programmatic Media Supply Chain Transparency Report published revealing only 36% of budgets reach valid impressions
• January 21, 2025: Comscore State of Programmatic Report shows 72% of marketers plan increased investment
• March 13, 2025: Senator Lee reintroduced AMERICA Act with bipartisan support in 119th Congress
• May 14, 2025: Microsoft announced Xandr DSP sunset by February 28, 2026
• July 18, 2025: The Trade Desk joined S&P 500 index following strong programmatic growth
• July 25, 2025: Meta announced withdrawal from EU political advertising citing TTPA compliance challenges
• July 2025: Publishers deployed bid throttling strategies to tackle programmatic waste
• August 27, 2025: IAB Technology Laboratory declared Prebid transaction ID changes violate OpenRTB specification
• August 29, 2025: Brian O'Kelley posted LinkedIn analysis predicting DSP direct supply relationships and potential DOJ intervention

PPC Land explains

Transaction ID: A unique identifier assigned to individual advertising impressions within programmatic auctions to enable tracking and deduplication across multiple supply-side platforms. Transaction IDs allow demand-side platforms to recognize when different bid requests represent the same advertising opportunity, theoretically reducing unnecessary auction activity and preventing duplicate bidding. The OpenRTB specification originally intended these identifiers to provide cross-exchange visibility, but recent implementation changes by Prebid have modified this approach to ensure each bidder receives different transaction identifiers even for identical auctions.

Demand-Side Platform (DSP): Software platforms that enable advertisers and agencies to purchase digital advertising inventory programmatically across multiple exchanges and publishers. DSPs provide campaign management tools, audience targeting capabilities, creative optimization, and performance analytics while using algorithmic bidding to optimize campaign outcomes based on advertiser objectives. These platforms aggregate inventory from various sources and seek to identify the most efficient supply paths to maximize advertiser return on investment.

Supply-Side Platform (SSP): Technology platforms that help publishers manage, optimize, and sell their digital advertising inventory programmatically. SSPs connect publishers to multiple demand sources including ad exchanges, demand-side platforms, and ad networks to maximize revenue through automated auctions. These platforms provide publishers with tools for inventory management, yield optimization, and revenue reporting across their digital properties while facilitating real-time bidding processes.

Programmatic Advertising: The automated buying and selling of digital advertising space through real-time bidding systems that complete transactions within approximately 100 milliseconds as web pages load or applications open. This method uses data and algorithms to purchase ad inventory across display, video, mobile, and connected TV environments, enabling precise audience targeting and efficient media buying at scale. Programmatic advertising has grown to represent a significant portion of digital advertising spending, with 72% of marketers planning increased investment in 2025.

OpenRTB Specification: An open industry standard developed by the IAB Technology Laboratory that defines the communication protocol for real-time bidding in digital advertising. OpenRTB establishes technical requirements for bid requests, bid responses, and auction processes to ensure interoperability across different advertising technology platforms. The specification includes standards for transaction identifiers, audience data sharing, and bid processing that enable seamless integration between demand-side and supply-side platforms.

Header Bidding: A programmatic advertising technique that allows publishers to offer their inventory to multiple demand sources simultaneously before making calls to their ad servers. This approach enables publishers to receive multiple bids in real-time and select the highest-value offer, typically resulting in increased revenue compared to traditional waterfall methods. However, header bidding implementations often create duplicate bid requests for the same impression across multiple supply-side platforms.

Supply Path Optimization (SPO): Strategies employed by buyers and sellers to create more efficient routes for programmatic transactions, reducing intermediation costs and improving transparency. SPO initiatives aim to eliminate redundant auction paths and reduce the number of intermediaries between advertisers and publishers. These optimizations help advertisers achieve better value for their media investments while providing publishers with more direct access to demand, though they often occur without publisher input.

Prebid: An open-source header bidding wrapper that enables publishers to conduct programmatic auctions across multiple demand partners simultaneously. Prebid provides standardized integration methods for supply-side platforms and demand-side platforms while offering publishers greater control over their advertising inventory monetization. Recent changes to Prebid's transaction ID implementation have created controversy within the industry due to concerns about OpenRTB specification compliance.

Real-Time Bidding (RTB): An auction-based system where individual advertising impressions are bought and sold within approximately 100 milliseconds as web pages load or applications open. Multiple advertisers submit bids simultaneously based on available audience and contextual information, with the highest bidder winning the right to display their advertisement. RTB forms the foundation for most programmatic advertising transactions across display, video, mobile, and connected TV environments.

IAB Technology Laboratory: The digital advertising industry's primary technical standards organization responsible for developing specifications, guidelines, and best practices for advertising technology platforms. The IAB Tech Lab creates standards like OpenRTB, ads.txt, and various measurement protocols that enable interoperability across the programmatic advertising ecosystem. The organization recently criticized Prebid's transaction ID implementation changes as violating established OpenRTB standards and called for collaborative solutions to address industry concerns.

Summary

Who: Brian O'Kelley, Co-Founder and CEO at Scope3, published analysis of transaction ID controversy affecting demand-side platforms, supply-side platforms, publishers, and advertisers across the programmatic advertising ecosystem.

What: Industry dispute over transaction identifier standards implementation, with DSPs seeking supply path optimization through predictive algorithms while publishers express concerns about revenue impact and data privacy. The IAB Technology Laboratory declared Prebid's transaction ID changes violate OpenRTB specifications.

When: The controversy reached public prominence on August 29, 2025, following O'Kelley's LinkedIn post, after the IAB Tech Lab's August 27, 2025 statement criticizing Prebid's implementation changes that eliminate cross-exchange visibility for identical auction opportunities.

Where: The dispute affects the global programmatic advertising ecosystem, with particular impact on header bidding implementations, Prebid Server integrations, and OpenRTB-compliant platforms operating across multiple supply-side and demand-side platforms.

Why: The controversy stems from fundamental tensions between DSP optimization goals, publisher revenue protection, privacy considerations, and technical standards coordination, highlighting broader programmatic advertising transparency challenges requiring potential regulatory intervention as the industry approaches $700 billion in annual ecosystem value.