All You Need to Know About Exchange Bidding in Dynamic Allocation (EBDA)

Exchange Bidding

Ad publishers rely on the bidding process to calculate the costs per impression. A bid refers to the maximum amount a publisher is ready to pay for a specific auction. Search engines offer different bids like cost per click or cost per 1000 impressions. The budget signifies the maximum amount you are willing to spend on your ad for a specific period.

Exchange Bidding in Dynamic Allocation (EBDA) is a server-side alternative to header bidding. If you want to know more about Exchange Bidding in Dynamic Allocation, here is the information.

What Is Exchange Bidding in Dynamic Allocation?

Before introducing EBDA, Google Ad exchange had a “last look” at all impressions, and they had the last opportunity to place the previous bid. With this model, Google could outbid most advertisers with a small margin which most publishers did not like. As a result, many publishers felt disadvantaged while placing bids in the auction. Hence, Google introduced Exchange Bidding in Dynamic Allocation, providing a level playing field to all.

In Exchange Bidding in Dynamic Allocation, the SSPs, Ad exchanges compete with Google Ad exchange to win impressions in a unified auction.

What is the Process of Exchange Bidding?

  • The process starts when any party initiates an ad request. Next, the proposal is passed to the Ad Manager server. Next, the Ad manager plans a unified auction to determine the best yield for the available inventory. Here are some tasks that are part of the process.
  • Ad manager selects a best-trafficked item to compete.
  • A request is sent to all partners, including third-party exchanges, Ad exchange, and networks.
  • The Yield partners plan their auction and send their most competitive bid to the Ad Manager for the auction.
  • The Ad Manager holds a unified auction and selects the best bid.
  • The Ad Manager returns the request page, and the winner’s name is displayed on the publisher’s ad space.

What are the benefits of Exchange Bidding?

Publishers prefer exchange bidding for the following reasons:

  • Easy Implementation – the bidding process is handled server-side, and the publishers are not required to install any software or perform any updates to place their bids in the auction.
  • Reduced Latency – the time factor is crucial when placing last moment bids at the end of auctions. It means the response time is faster for bids, the ads are served pretty quickly, and pages are loaded faster. Since exchange bidding is held server-side, no additional JavaScript is loaded in the browser. Instead, the bidding happens in the Google Infrastructure, making the whole process faster.
  • Better User Experience – due to reduced Latency, publishers have a better user experience with exchange bidding.

What is the Difference Between Exchange Bidding and Header Bidding?

  • Auction Type – Exchange bidding is server-side while header bidding is client-side
  • Level of Technical Knowledge Required – Exchange bidding requires minimal technical knowledge, while header bidding requires advanced-level technical understanding.
  • Advantages – Exchange bidding offers reduced page latency and reduced overall ads complexity. Header bidding provides greater control and presents better transparency through cookie control.
  • Payment – In exchange bidding, the cost is managed by Google, while individual publishers manage costs in header bidding.

Thus, Exchange Bidding in Dynamic Allocation has automated the whole bidding process. Every ad publisher has a level playing field to win cost-effective impressions for their clients.

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