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Posted on Feb 15,  2022

Optimizing Profit With Renewed Traffic Throttling Mechanism

Your ad exchange is a complex mechanism and successful media trading on it can be influenced by numerous factors — performance of connected partners, quality of traffic, and most importantly how it is distributed. When supply matches demand DSPs receive the traffic they need most and SSPs in their turn effectively sell inventory. Your SmartHub is created with specific leverages that give you the opportunity to match supply and demand correctly – it is called a traffic throttling mechanism. Recently, in SmartHub 2.0 upgrade we renewed its mechanism so that now it also serves as a profit optimization tool. So, let’s discover how it works and helps you to keep your marketplace efficient.

1. Sending the right traffic towards DSPs

The more impressions are getting served within your marketplace, the more profits your ad exchange will be able to generate. For this reason, it is important for the ad exchange owner to integrate those supply partners whose traffic will be actively bought by demand partners. The next task is to distribute this traffic correctly and to channel this traffic to the demand partners that need it most. While some DSPs might need, let’s say, mobile traffic, the other one may look for CTV, audio, or desktop. Additionally, there are much more impression criteria according to which DSPs may buy traffic (defined by the targeting set).

The traffic throttling mechanism works like the leverage that analyzes such impression criteria for each DSP in order to discover what type of traffic is preferred and most frequently purchased by it. Knowing this the system will automatically send more of such traffic towards this DSP. Thus, DSP gets the traffic it is most likely to bid on.

Also, the mechanism is self-learning – while 93% of traffic is optimized with this mechanism, 7% of the remaining volume is not sorted – it is sent to learn new parameters and adapt in case DSP forms new demand. For instance, DSP stops an ad campaign and no longer bids – then the data keys are erased by the adapter to prevent sending irrelevant traffic.

2. Optimizing profits based on impression prices

RCPM stands for real CPM (cost per mille, or cost per thousand impressions). RCPM is a valuable metric that can be used by both publishers and advertisers. Most frequently RCPM is used by publishers to measure how much revenue they obtained after having generated 1000 ad requests. If the RCPM metric is higher, the ad revenue becomes higher as well.

Those who use Google AdSense, can’t really find out how many ad requests they received, only those who use an ad server. 

In your SmartHub RCPM is now used as a basis that the traffic throttling mechanism takes into account for optimization. The calculating formula of DSP RCPM is DSP Spend/Bid Requests *1000000. This metric shows the performance of requests on the DSP side depending on spend and helps analyze which traffic is more profitable. Based on this information your system will be able to define what kinds of traffic are really working for DSPs in order to send more of such traffic towards them.

To wrap it up

With renewed traffic throttling mechanism you can rest assured that the media trading in your marketplace is kept profitable at all times. This mechanism lets you effectively deliver the right traffic to the right DSPs. Additionally, in the latest update, this mechanism also learned how to take into account and analyze RCPM so that each DSP could get the best traffic that is worth bidding on.

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