The Dynamics of Real Time Bidding, OpenRTB, and Derivatives on Ad Impressions — with Ivan Guzenko

This week on the podcast we talk with Ivan Guzenko about a variety of topics related to Real Time Bidding. This is a technical deep dive into how real time bidding works, the types of bids that are possible and what this means for the industry. Ivan walks us through the different types of protocols found within OpenRTB and the types of bids that he think aren’t being used enough in the industry.

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Towards the end of the episode, we also get into the concept of derivative style products that could be built on top of ad impressions. Derivatives, such as futures and options, are common in the financial world and conceptually could exist in programmatic world as well. A few companies have discussed creating these products, however none of them have yet created them.

Ivan’s company, Smarty Ads is looking into the possibility of creating such derivatives, and has promised to keep us up to date on their progress.

Show Notes

2:05 — Real Time Bidding

2:21 — Ivan’s background and how he got into this world

2:50 — The reason we have 1 protocol for RTB

3:52 — Why having one RTB protocol is helpful for the industry

5:00 — How this helps targeting

7:29 — How the bidding process works

8:20 — How this protocol empowers media buyers

8:51 — Changes to the bid types within the protocol that are underused

9:50 — Examples of how buying programmatically could work differently

11:20 — Bidding strategies for RTB

12:21 — Are most of these innovations only on the buy side or are there strategies for publishers as well?

13:15 — How this affects header bidding and first look for buyers

14:15 — Using machine learning on the publisher side

14:40 — Fraud in the industry and non human traffic

16:10 — How this fraud reduces publisher income

17:19 — How should publisher make sure their inventory is being priced correctly?

19:00 — Machine learning applied to content and its benefits

20:55 — Is applying machine learning within reach of most publishers?

22:38 — How this protocol can be used for fraud

24:19 — How arbitrage can affect the bidding process, is it a good thing or bad thing?

25:44 — An example of good arbitrage

29:00 — Financial products concepts making their way to ad tech

29:50 — Futures and options for impressions

30:20 — Why you would use futures or options in trading impression

32:10 — How options and futures will help publishers

35:15 — Message for the larger ad ops world