Waterfall mediation has been the standard setup in ad monetization for the past decade. Under waterfall mediation, when an ad impression becomes available, a publisher’s ad server calls demand sources one by one, in order of average historic price, not what they are willing to pay for that particular impression. This creates a potential loss of revenue. In some cases, the demand source willing to pay the most for a particular impression never gets called because it is further down in the chain.
Waterfall mediation is a legacy ad technology that restricts competition and prevents publishers from earning the most for every impression. Publishers don’t know when they’re leaving money on the table. And advertisers may not get a fair shot at the inventory, resulting in skewed average historical prices. Because of this, Audience Network recommends that you transition from waterfall mediation to bidding.
While publishers migrate to bidding, many will need to maintain both waterfall and bidding simultaneously. For an optimal hybrid bidding integration, dynamically merge the bidding auction and the waterfall so they run in parallel. The two winners should then compete for the impression.
Here are a few additional factors essential to a well-functioning hybrid setup: