• by Joe Mandese  @mp_joemandese, December 9, 2019

If you’re a regular reader of RTBlog, you probably remember the programmatic industry tempest that dusted up around so-called “bid caching,” an ingenious, but as it turned out, not-so-transparent method exploited by Index Exchange until it was exposed in 2018.

The practice, which effectively cached and kept reusing an advertiser’s bid request until it yielded a win was a short term boon for Index Exchange, enabling to win a disproportionate share of bids vs. other exchanges. The problem is it did it without anyone’s knowledge, which some ad execs charges was tantamount to fraud because it effectively changed the terms of their programmatic media-buying agreements.

But even has Index Exchange suspended the practice, some on the demand-side thought it was an innovation that merited a second look. Well, at least one other exchange agreed and it has quietly begun rolling it out, albeit on an explicitly transparent basis.

“It solves a couple of problems,” says Joey Leichman, vice president of buyer development at OpenX, which has brought the method back as part of its so-called “OpenAudience Bidding” solution.

So far, OpenX is testing the method only in its private marketplace deals, which require lots of advance work to set up deal IDs and implement, but often don’t yield a substantial amount of audience wins.

“People go through the trouble of setting up a deal ID and it ends up yielding $20,” says Leichman, noting “that’s not very efficient.”

The second problem the new approach solves for, he says, is that it gives a marketer more opportunities to get what they set the bid up to win in the first place: consumers.

“Marketers today are all about audiences, and sometimes there is a small pool of people they want to win,” Leichman explains, adding, “So you only have so many chances to with the consumer you want, especially if you’re in a win-at-all-cost targeting for direct response. This gives you more opportunities to win the exact user they want.”

Most importantly, Leichman says it gives marketers more opportunities for winning and fulfilling the terms of their original bid, and doing it in a 100% transparent way, governed by specific rules set up as part of the the bidding process.

“We’re testing this. Early results are positive,” says OpenX President John Gentry, adding, the initial feedback from the demand-side has been good, but it will continue to offer it only as part of private marketplace deals, until the marketplace is comfortable with it.