Global ad marketplace Index Exchange has been bid caching for more than a year, but did not make buyers aware until a recent blog post.
Bid Caching involves holding onto a bid when a buyer loses a programmatic auction and then trying to use it to serve an ad moments later in a piece of content.
The practise has allowed Index Exchange to gain market share and deliver higher CPMs to publishers, but has angered media buyers and rival exchanges, according to AdExchanger.
AdNews understands Index Exchange is set to release a further statement this week.
Index Exchange told AdExchanger it was unaware bid caching and not revealing the practise to partners would anger media partners, and has used a blog to explain why it does it.
“Bid caching is used in latency constrained environments to allow a buyer to win a bid they otherwise would have little chance to participate in,” the company said.
“The most common examples are video (at the mid-roll, and post-roll points as consumers will not tolerate wait time for ad decisioning), responsive design (increasingly ads load as a user navigates a page, something that should never “block” the content that follows), mobile environments leveraging prefetched content, or swiftly traversed slide galleries.
Index Exchange says the practise helps improve user experience and guarantees that buyers have “maximum opportunities available to increase win rate and purchase impressions across the audiences they highly covet”.
It also doesn’t use bid caching on every bid, only on the same inventory, for the same users and within a “very tight time window”.
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