Bidder as a Service: Old Whine in a New Bottle

How morally correct is rebranding old stuff to sell it as new? The answer depends on you.

Ad tech is a dynamic environment where new terms and definitions appear day by day. New names sell better and spark the interest of potential buyers. And let’s be honest, no one except IAB has time to check each.

Today’s topic is bidder as service – the new term for good old “third-party DSPs.” Who gave birth to it? What are the reasons behind its creation? Does the bidder as a service have a future? Let’s find out.

What Is Bidder as a Service?

First of all, let’s deal with the basic terms.

A bidder is the core of a demand-side platform. The term itself refers to good old real-time bidding, the process of automatic media buying with ad inventory sold per impression.

You know the drill. Real-time bidding protocol is the core of all (almost) programmatic advertising. It matches the publisher’s inventory with the advertiser’s demand, happens in milliseconds, and allows the highest bidder to win the ad placement.

A-ha, bidder! So that’s what it means, doesn’t it? Not quite. In this context, a bidder is merely “the one who bids on ad inventory.”

In our context, however, the bidder is the mechanism responsible for a programmatic advertising auction. Basically, when we talk about bidders, we imply demand-side platforms without the UI.

Why Bidder as a Service Makes Little Sense?

“If somebody in ad tech makes up a term and repeats it for 8 years, it becomes the reality”
Epom’s CSO, Andriy Liulko

In theory, bidder as service (BaaS) is an API-driven bidder with extra flexibility, functions, and customization. Sounds familiar? That’s because it is.

Basically, any modern third-party DSP with any level of customization can be marketed as BaaS.

But wait, it gets even more confusing. For instance, Beeswax’s bidder as a service (the root place for the term) is marketed as a fresh way to customize bidding for mid-sized ad businesses without the need to build everything from scratch.

On the other hand, Microsoft Xandr’s bidder is simply a service that allows the impression bus and the bidder to begin communication. In simpler terms, this is simply a set of APIs that makes programmatic bidding possible.

So yes, until IAB officially recognizes bidder as a service as a new thing and gives it a unified definition, there is no coherent consensus on what BaaS even is.

What Caused the Demand for the Bidder as a Service?

We could’ve stopped on the previous heading because there ain’t much to talk about from a technical perspective. However, if you want to dig deeper, like us, you probably wonder why the term even exists in the world where third-party DSPs are a seemingly well-known concept.

Besides the obvious money, bidder as a service emerged as a consequence of much more global processes in advertising as a whole with a bit of fallacy spice. We mean:

• Confusion in the ad tech industry

We explain the basics in each of our articles for a very good reason. Despite the fact that the web is flooded with amazing ad tech blogs, actual businesses often don’t want to dive deep into the “meta” of advertising space.

You’d be surprised to know how many advertisers don’t understand the fact that they are an ad agency or ad network or vice versa. The same goes for publishers. And who are we to blame them? Ad tech is complicated and confusing; businesses want to make money, not read a bunch of awesome articles on the Epom blog (although they should ofc).

• Trend towards customization

Customization, privacy, first-party data – even advertisers can be advertised with the right slogans.

In its marketing, bidder as service embodies what people in our business want, so why not? After all, actual features don’t bring the same fuzz, and we, as ad tech providers, also want to eat something.

• Desire for an alternative towards “yet another DSP”

The last one is obvious. Walled gardens are getting out of hand with their markups, while open web providers often lack the necessary spice. A marketable, SaaS-friendly alternative to “yet another DSP” is like a breath of fresh air in a highly competitive and convoluted market.

What Is the Future of Bidder-as-a-Service?

Despite the fact that Google backed down on its third-party cookie elimination, the industry is moving towards first-party data nonetheless. Third-party DSPs are already changing and implementing more privacy and customization features in the mix.

What about bidder as a service? Well, we can’t tell for sure. It’s highly unlikely for BaaS to substitute “third-party DSPs,” but who knows? Ad tech is a crazy environment, so everything’s possible.

For now, we advise not to clutter your mind with all of this. Stick to a bullet-proof white-label solution like Epom DSP, and you’ll be golden.

FAQ

• What is a demand-side platform?
  A DSP is a software platform that allows advertisers to buy digital ad placements programmatically across multiple ad exchanges and supply-side platforms in real time.The bidding is automated.
• What Is a white-label DSP?
  A white-label DSP means that you have a ready-to-use platform that can be customized and branded as your own. You still pay on a subscription basis, but maintain the benefits of having an in-house solution.
• Are all DSPs third-party DSPs?
  No, but most of them are. The difference is that with a third-party DSP advertisers rent access to the platform rather than creating their own infrastructure. However, some businesses build their DSP in-house. This has a lot of potential benefits, but the development is usually super-expensive and thus available only to the industry giants.
• What are the examples of DSPs and BaaS providers?
  Third-party DSPs: The Trade Desk, DV360, Xandr, MediaMath, Amazon DSP. Bidder-as-a-Service: Beeswax (FreeWheel), Xandr Bidder, RTBkit. White-Label DSPs: Epom DSP, BidSwitch, Smart AdServer.