What is waterfall auction and how does it work?

What is waterfall auction?

Waterfall is a programmatic technique used by publishers to sell the inventory in a sequential fashion by accessing one demand partner at a time in online advertising. It is also known as  daisy-chaining process.

Waterfall auction

How does the waterfall process works?

In waterfall process, Each demand partners and exchanges are ranked based on the historical performance that they driven to the publisher. The revenue and eCPM of inventories will decreases as we move down towards the waterfall process. 

• When an impression is available, the publisher's ad server will aim to fill this impression with the direct campaigns(Programmatic Guaranteed) as a priority. If, there is no eligible direct campaigns, then it will try to fill with the next demand partner.
• If still the impression doesn't match with any direct campaigns. Then, the impression will pass into premium networks(Preferred Deals) and typically the ad server will try to fill this impression. If not filled, then the impression will be passed to the next demand partner(Premium Market Place) in line.
• If the impression is still available even after passing through this process. The impression will pass into open network(Open Auction RTB) where the remnant inventories are filled.

Remnant Inventory : The unsold inventory in the publisher's webpage is called remnant inventory.

Here comes an advanced technology called Header bidding to help publishers to increase the revenue for their Inventory before it goes through the waterfall auction.

Header Bidding 

Header bidding is an advanced programmatic technique that sends multiple bid requests to various exchanges simultaneously before the bid request passes into waterfall bidding. Header bidding eliminates the waterfall method where the inventories are filled based on the priorities

Read more at : https://ads-entrepreneur.blogspot.com/2022/03/what-is-header-bidding-and-how-it-works.html