With an abundance of ad inventory across platforms today, video has emerged as the premium format commanding the highest CPMs and engagement rates. As ad dollars shift from traditional television to digital video—including the open web, connected TV (CTV), and digital out-of-home (DOOH)—ensuring auctions are conducted fairly has never been more important.
Let's explore what makes a digital video auction truly fair and how media owners can assess whether an online video platform or ad server is offering transparency and equity in bidding.
Why auction fairness matters for publishers
The stakes are high in any given ad auction: media owners depend on fair play to maximize revenue without alienating buyers; advertisers need confidence they're paying market value; and the entire ecosystem requires sustainable economics to thrive. When auction mechanics break down, everyone loses—including viewers who end up with repetitive, irrelevant ads.
Fair auctions help media owners build trust with buyers, as each demand source has an equal chance to bid, and pricing reflects genuine market demand. By calling all possible demand partners at the right prices, media owners increase both fill rates and bid density, which boosts the market value of their supply.
Challenges in video that create unfair auctions
While online display ad auctions have been highly standardized for years, several common issues continue to undermine auction fairness in digital video environments.
Signal loss
As bid requests travel through the supply chain, critical information often gets stripped out or altered. This issue is especially significant in video advertising, where buyers rely on a broader set of signals to determine inventory value.
Unlike display ads, video inventory carries more granular signals—such as content category, player dimensions, autoplay settings, and completion rates—that buyers actively use for targeting and pricing decisions. When these detailed parameters are lost in transmission, it directly impacts bid values and can lead to suboptimal auction outcomes across all digital video environments.
Inventory duplication
The risk of duplication is particularly acute across CTV, DOOH, and in web environments, where the same ad impression may be offered through multiple resellers, and as many as 5-7 different paths simultaneously. This artificial inflation of supply drives down prices and creates inefficiencies.
Floor price manipulation
Dynamic floor prices can be valuable tools for yield optimization, but when implemented without transparency, they can undermine trust. Video pricing floors that change unpredictably or are set arbitrarily high without market justification damage ecosystem health.
Inconsistent auction dynamics
Different video platforms may implement auction types and rules inconsistently, creating confusion for buyers and potentially potentially putting certain demand partners at a disadvantage. Some might run first-price auctions while others use second-price models, or apply different timeouts that impact which bids are considered, all without clear communication to participants.
Key indicators of a fair auction process
How can you tell if your video auctions are fair? Here are some essential indicators to look for:
- Access to auction data: Make sure you can see aggregated revenue and performance in real time, including bid floors, fill rates, and CPMs. This data helps you understand what is driving auction outcomes and possible inconsistencies.
- Transparency in bidding: Your vendor should offer visibility into the auction’s inner workings, including won and lost bid prices to ensure demand is being treated fairly.
- Consistent auction results: Fair auctions tend to produce relatively stable revenue and ad performance. Unexplained fluctuations in CPMs, fill rates, or bid volumes may suggest issues with auction fairness.
- Demand-agnostic approach: A fair auction allows equal access to all demand sources, including publisher, direct, and programmatic. When vendors favor certain buyers or demand sources, it can distort pricing and reduce revenue potential.
- Maximum technology benefits: Every demand source should be able to leverage all the benefits of the vendor’s native technology, including AI algorithms, identity vendors, and internal server logic.
How to verify auction fairness in practice
To ensure auction fairness, it’s essential to take a hands-on approach with the available data and insights.
- Analyze auction reports: Request access to regular auction reports and analyze metrics like bid prices, CPMs, and fill rates. Consistency across these metrics can indicate a fair process, while irregularities may suggest favoritism or inefficiencies.
- Compare with industry benchmarks: Compare your auction performance metrics, such as CPMs and fill rates, with industry standards. Significant deviations without clear explanations may indicate issues with auction fairness.
- Test with multiple demand partners: Experimenting with various demand sources can reveal if certain sources are prioritized. For instance, if a particular partner always wins despite others bidding competitively, it could indicate preferential treatment.
- Conduct a price vs. value assessment: Analyze whether prices correlate with other key performance metrics like viewability, completion, engagement, and conversions.
Why privacy and AI are the next frontier
The rapid growth of streaming video, coupled with changing viewer behaviors and regulatory landscapes, creates both challenges and opportunities for ensuring auction fairness. Privacy and AI are two key developments media owners must monitor in the coming years.
Privacy-centric evolution
As privacy regulations nudge the industry towards cookieless targeting, first-party data and contextual signals gain renewed importance in the bidding process. Alternative identity solutions will need fair and consistent implementation across the ecosystem, while ensuring that increased privacy doesn't come at the cost of transparency.
AI and machine learning
Real-time AI and machine learning (ML) are making significant strides in solving broken auction dynamics. Predictive floor pricing allows publishers to maximize yield across demand partners without manual intervention, creating more responsive marketplaces. Real-time quality monitoring identifies technical problems or manipulations as they emerge rather than in post-campaign analysis. And, better performance forecasting helps both buyers and sellers execute more confident bidding strategies.
Maximize video revenue the right way
Fair auctions in digital video aren't just an ethical imperative—they're a business necessity. With every auction call, there is ad revenue, fill rates, and, and advertiser trust on the line. When publishers use transparent systems that maximize true competition, advertisers gain confidence to increase investment. This virtuous cycle benefits the entire ecosystem.
Short-term tricks to boost yield or fill rates ultimately backfire. As video advertising continues its growth across web, CTV, and DOOH, the media owners that team up with the right technology partners and fair auction methodologies will ultimately win over the long haul.
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