Zillow pilots containerized RTB to improve programmatic ad quality

Real estate platform Zillow has become the first brand advertiser to test a new programmatic buying strategy called containerized real-time bidding (RTB). According to AdExchanger reporting published on August 6, 2025, the pilot addresses Zillow's challenge of increasing programmatic scale while maintaining ad placement quality.

The containerized RTB approach embeds demand-side platform intelligence directly within the supply-side platform infrastructure. This configuration enables advertisers to access detailed site-level data that traditional programmatic buying cannot provide through standard bid request information.

Ed Wild, Zillow's VP of media, told AdExchanger the company wanted to shift toward "environments where we are proud to show up." The real estate listings platform sought higher-quality programmatic placements while avoiding brand suitability concerns typically associated with scaled programmatic campaigns.

The pilot program utilizes technology from startup Chalice Custom Algorithms operating within Index Exchange's infrastructure. According to the social media post visible in the attached LinkedIn screenshot, Chalice describes its approach as requiring "at least 8 signals and containerized RTB" for effective implementation, with Canvas Worldwide and Zillow identified as first beneficiaries.

Technical implementation details

Index Exchange hosts a virtual instance of Chalice's ad-buying model within its own data servers and cloud hardware. This configuration provides the containerized system access to granular site information typically available only to sell-side vendors with direct publisher relationships.

Sally Lee, VP of programmatic at Canvas Worldwide, explained to AdExchanger that the system can analyze metrics including ad ratio per page, default sound settings for video ads, refresh rates, organic video length, and data broker calls. These data points remain invisible to traditional demand-side platform bidding because they are not transmitted through standard RTB bid requests.

"We have more controls over the granular engagement metrics that people don't think about," Lee said. Canvas Worldwide manages the containerized RTB campaign for Zillow and operates one additional pilot with an undisclosed automotive brand.

The enhanced data access enables dynamic site inclusion decisions using artificial intelligence tools. Rather than relying on static approved site lists, the AI-powered system can evaluate new websites in real-time based on quality metrics and engagement indicators.

Quality focus over cost optimization

Wild emphasized that containerized RTB helped Zillow identify quality programmatic inventory regardless of cost-per-thousand (CPM) pricing. The approach contradicts traditional programmatic strategies that prioritize low CPMs as efficiency indicators.

"There is nothing inherently good about a low CPM," Wild told AdExchanger. Quality programmatic video placements may command premium pricing compared to YouTube's reach-focused inventory, but Zillow accepts higher costs when correlated with performance outcomes.

The strategy targets premium programmatic video environments with strong engagement metrics rather than well-known publisher brands. Wild said Zillow aims to "support those higher-quality publishing environments" that resist programmatic optimization tactics like excessive ad loading or muted autoplay videos.

According to Wild, the containerized RTB pilot demonstrated "better returns by reaching people in those trustworthy places." The improved performance metrics justified premium CPM pricing when associated with quality inventory and engagement data.

Industry context and implications

The containerized RTB development occurs amid broader programmatic advertising infrastructure changes. Google completed its transition to OpenRTB protocol on February 15, 2025, abandoning proprietary Authorized Buyers RTB protocol in favor of industry standards.

Recent industry research shows programmatic advertising growth reaching 72% according to Comscore data released on January 21, 2025. Connected TV inventory share is projected to double from 14% in 2023 to 28% in 2025, while retail media networks embrace RTB for sponsored products through partnerships like Pentaleap and Teads.

Andrew Casale, Index Exchange CEO, commented on the LinkedIn post that the development represents "efficiency on the rise as programmatic advances to its next chapter." Casale praised Zillow's approach of rewarding publishers with quality content rather than "turning to the gimmicks and gamesmanship" incentivized by traditional programmatic budgets.

The collaboration between Index Exchange and Chalice aligns with Index Exchange's strategic investment in First Party Capital announced at Cannes 2025 on July 14. The investment supports AI-powered advertising technology startups addressing programmatic challenges.

Chalice Custom Algorithms operates as an AI software provider enabling brands to configure machine learning models for specific campaign outcomes. The company's platform integrates with measurement and data partners while supporting cookieless advertising through impression-value prediction rather than user-based targeting.

Market transparency concerns

The containerized RTB approach addresses ongoing transparency issues within programmatic advertising supply chains. Industry studies reveal substantial financial leakage, with publishers receiving only 51 cents per advertising dollar according to Incorporated Society of British Advertisers research cited in recent PPC Land analysis of agentic AI threats to demand-side platforms.

Wild's emphasis on quality over cost reflects broader industry concerns about made-for-advertising websites and low-value inventory flooding programmatic channels. The Association of National Advertisers found 42% of programmatic spending directed toward "nonworking media" rather than actual advertising placement.

Canvas Worldwide's Lee noted that containerized RTB campaign management resembles typical DSP operations from the agency perspective. The primary difference involves enhanced data availability enabling more sophisticated quality assessments and dynamic inventory decisions.

Future programmatic developments

The Zillow pilot represents early-stage testing of containerized RTB technology. Chalice and Index Exchange first proposed the approach in 2024, with Zillow serving as the inaugural brand advertiser for commercial testing.

According to Chalice documentation, the company's AI models operate across multiple advertising platforms with transparent algorithmic processes. The platform claims to eliminate black-box decisioning through auditable algorithms and secure large language models that identify targeting connections.

Industry observers suggest containerized RTB could influence broader programmatic buying strategies as advertisers seek quality inventory amid signal loss and privacy restrictions. The approach combines traditional programmatic scale with enhanced data access typically available only through direct publisher relationships.

The pilot timing coincides with increasing artificial intelligence adoption throughout programmatic advertising operations. Industry veteran analysis suggests agentic AI could fundamentally disrupt demand-side platform business models through automated campaign management and optimization functions.

Canvas Worldwide manages campaigns for both clients currently using containerized RTB, suggesting gradual expansion rather than immediate widespread adoption. The agency's experience with automotive and real estate verticals may inform future category applications and optimization strategies.

Zillow's median buyer demographics show $97,600 annual income with 70% holding four-year degrees, according to Zillow Consumer Housing Trends Report 2024 data. The 42-year median age buyer profile represents valuable advertising audiences across multiple product categories beyond real estate services.

Timeline

• 2024: Index Exchange and Chalice Custom Algorithms first propose containerized RTB concept
• February 15, 2025: Google completes transition to OpenRTB protocol
• July 14, 2025: Index Exchange announces investment in First Party Capital at Cannes
• July 24, 2025: Pentaleap and Teads announce RTB partnership for retail media
• August 6, 2025: AdExchanger reports Zillow containerized RTB pilot with Chalice and Index Exchange

Summary

Who: Zillow (real estate platform), Chalice Custom Algorithms (AI advertising startup), Index Exchange (supply-side platform), Canvas Worldwide (agency)

What: Containerized real-time bidding pilot program embedding demand-side platform intelligence within supply-side platform infrastructure to access enhanced site-level data for quality-focused programmatic advertising

When: Pilot testing reported on August 6, 2025, following initial concept development in 2024

Where: United States programmatic advertising market, with technology hosted on Index Exchange's cloud infrastructure

Why: Address Zillow's challenge of scaling programmatic advertising while maintaining brand-suitable, high-quality ad placement environments and supporting premium publishers over made-for-advertising websites

Key Terms Explained

Containerized RTB: A new programmatic buying approach that embeds demand-side platform intelligence directly within supply-side platform infrastructure. Unlike traditional RTB where bidding decisions rely on limited bid request data, containerized RTB provides access to detailed site-level metrics including ad ratios, video settings, refresh rates, and engagement indicators. This technology enables more sophisticated quality assessments while maintaining programmatic scale and automation.

Programmatic Advertising: The automated buying and selling of digital advertising inventory through technology platforms rather than direct human negotiations. Programmatic systems use algorithms, data, and real-time bidding to purchase ad placements across websites, mobile apps, and connected TV platforms. The approach enables precise targeting, dynamic pricing, and efficient campaign management at scale across millions of available advertising opportunities.

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, and mobile environments.

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.

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. These platforms aggregate inventory from various sources and use algorithmic bidding to optimize campaign outcomes based on advertiser objectives.

Quality Metrics: Measurable indicators that assess the value and suitability of digital advertising placements beyond basic targeting parameters. Quality metrics include engagement signals like time spent on page, content relevance, ad placement visibility, site load speeds, and brand safety indicators. These measurements help advertisers identify premium inventory that delivers better campaign performance despite potentially higher costs per thousand impressions.

Cost Per Thousand (CPM): A pricing model in digital advertising where advertisers pay a fixed rate for every thousand ad impressions delivered. CPM serves as a standard metric for comparing inventory costs across different publishers and platforms. While traditionally viewed as an efficiency indicator, the containerized RTB approach challenges the assumption that lower CPMs automatically represent better value for advertisers.

Artificial Intelligence (AI): Machine learning technologies that enable automated decision-making and optimization in advertising campaigns. AI systems analyze vast datasets to identify patterns, predict performance outcomes, and make real-time bidding decisions without human intervention. In programmatic advertising, AI powers audience targeting, creative optimization, fraud detection, and dynamic pricing strategies across millions of advertising opportunities.

Brand Safety: Practices and technologies designed to ensure advertisements appear alongside appropriate, high-quality content that aligns with brand values. Brand safety measures include content categorization, keyword filtering, site quality assessments, and contextual analysis to avoid placement near controversial, harmful, or unsuitable material. These protections help maintain brand reputation while enabling programmatic scale and reach.

Canvas Worldwide: An independent media agency that purchases advertising inventory through the containerized RTB solution on behalf of client brands. Canvas Worldwide executes programmatic buying strategies across multiple platforms while providing media planning, campaign management, and performance optimization services. The agency works with Zillow and one other client, an automotive brand, utilizing the containerized RTB buying methodology to access enhanced quality metrics and site-level data for improved campaign outcomes.