In the dynamic world of digital advertising, the concept of cookieless programmatic advertising has been gaining traction. With the impending extinction of third-party cookies and heightened concerns over user privacy, the industry is actively exploring alternative methods to deliver targeted ads. However, a significant obstacle looms large, threatening to impede the viability of cookieless programmatic advertising within the current ecosystem – bid throttling.
What is Bid Throttling?
Bid throttling refers to the intentional slowing down or limitation of bid requests that advertisers and demand-side platforms (DSPs) receive from supply-side platforms (SSPs) or publishers. This practice is typically implemented to address various concerns, including saving costs, improving ecological impact or combating ad fraud. Although these objectives are commendable, bid throttling has given rise to a myriad of challenges for advertisers or ad technologies looking to transition to cookieless programmatic advertising. In short, throttling strives to promote the supply that is most likely to be bought -> i.e. traditionally google chrome with its 3rd party cookies.
The Disrupted Access to Inventory
Bid throttling effectively disrupts the access to cookieless inventory within the programmatic advertising ecosystem. Advertisers rely on bid requests to gain insights into available ad inventory, user context, and engagement opportunities. Throttling these requests means advertisers receive no, limited, delayed, or incomplete data, significantly hindering their ability to make informed and timely bidding decisions.
Every SSP has been building Throttling strategies, many have no impact on cookieless monetisation such as geographical throttling. It makes no sense to send requests to a DSP that only buys ads in a specific region. But some throttling rules rely solely on not sending requests that have very little chances of being sold. Now guess which requests are less likely to be sold in a world where DSPs only bid on requests providing user identifiers? The cookieless ones.
This means that over time, SSPs have dramatically reduced the amount of requests sent that are typically cookieless. It's good for the planet, it's good for SSPs margins, but it's bad for advertisers and publishers who can't access those audiences. Advertisers and DSPs find themselves in a precarious position, unable to access real-time information about available ad impressions. This impediment adversely affects their capacity to execute effective ad campaigns. The broken data pipeline created by bid throttling thus renders it nearly impossible for cookieless programmatic advertising to function seamlessly within the current ecosystem.
In short, as a buyer, you might implement cookieless strategies, using for example contextual data in your DSP, your ads will continue to disproportionately deliver on Google Chrome. Preventing you from accessing cookieless audiences, who remain locked despite your efforts. Because identification is not the only problem in a cookieless world, the pipelines are broken too.
The Imperative of Innovation
As the industry contends with the complexities of bid throttling in a cookieless programmatic landscape, the need for innovation becomes increasingly evident. Advertisers, publishers, and technology providers must collaborate to explore inventive solutions that respect user privacy while facilitating effective advertising.
Bid throttling has emerged as a substantial obstacle on the path to cookieless programmatic advertising within the existing digital advertising ecosystem. The disruption it causes to data flow, coupled with privacy concerns and regulatory compliance, makes it exceptionally challenging for advertisers to achieve the precision and effectiveness they once enjoyed with traditional programmatic methods.
Addressing bid throttling necessitates a collaborative approach and a commitment to discovering innovative solutions that respect user privacy while enabling personalized advertising. As the industry adapts to the evolving landscape, it is imperative to strike a delicate balance that upholds user rights without compromising the efficacy of digital advertising. Only then can cookieless programmatic advertising truly flourish within the existing ecosystem.
We need to enter in a new programmatic era, that does not waste so many resources, that does not discriminate so much inventory, that does not consume so much personal data. Privacy is demanded by consumers, legislators and big tech. Let's give it to them without compromising on sustaining a trusted web, let's do better as an industry.