Last Updated: November, 2023
Networks/Exchanges usually have fees associated with buying through their supply path. These can either be supply side or demand side fees. While in most cases networks/exchanges claim to have removed demand side fees, the truth is that DSPs such as Kayzen have little to no visibility on what the actual fees being charged, whether supply or demand side.
Having visibility on the fee structure of the supply paths being leveraged is key in order to understand how much your purchasing power is being diminished by intermediary margins.
High take rates and compound supply paths can greatly diminish your working media purchasing power
In-App Bidding vs Waterfall
Before diving into exchange specific fees, it is important to understand whether the exchange/network you are buying from is on a waterfall or in-app bidding instance on the publisher's mediation. To learn more about this, check out this article
Networks / Exchanges that have in-app bidding enabled SDKs are usually charged at least 5% by the mediation platform, whereas waterfall based SDKs are not. While the standard is 5%, for example Google AdMob charges 10% in the case of video.
AppLovin, Fyber, Google ADX and Ironsource/Unity are bidding into their own mediations, yet no additional fee is applied as it is with 3rd party SDKs.
The following exchanges are still waterfall based on most mediations: Fyber, Unity, Chartboost.
Smaato and PubNative have gone bidding recently, but adoption is still low so mostly they are waterfall based.
Ad Exchange fees
Most fees range somewhere between 10% and 30%, but can go higher in some cases. Once again, unfortunately most fees are not disclosed to buyers, and even in some cases not disclosed to publishers either.
Nonetheless, at Kayzen we've been researching this topic and so far have collected the following.
AppLovin: Standard is 20%, but we know this varies from publisher to publisher. Our understanding is that publisher previously on MoPub retained their previous fee structure, which was mostly lower than 20% as MoPub also used to charge demand side fees.
Amazon: 10% for UAM publishers. 0% for TAM publishers. Currently Lite Games, Promiflash and Zynga are on Amazon TAM.
Appodeal / BidMachine: Though not confirmed by them, our data suggests they manage a 22% fee.
Bidswitch: 8% on top of whatever the exchange behind it charges (remember that bidswitch acts as an exchange/ssp aggregator and is not an exchange in itself)
Mintegral: they manage dynamic margins in order to optimize for win rates, but they usually range between 5% and 15%.
Nimbus: 3% - 5%.
MobilityWare: 0% as this is owned and operated by the publisher itself.
We estimate that waterfall based exchanges have the possibility of playing around with dynamic fees to maximize margins, as they have as an additional input the waterfall placement bid floor and the demand source bid price. Hence there is a higher risk of higher margins when buying from a waterfall based exchange.
The impact of resellers on the supply chain
Exchanges usually source their traffic directly from publishers, either through a direct SDK integration or S2S connection.
In some cases, exchanges make their inventory accessible not only to DSPs, but also other SSPs. Supply paths that have more than a single intermediary (exchange) are considered indirect supply paths.
When developing an SPO strategy, it is important to prioritize direct supply paths, as indirect paths, by having more than one intermediary, will result in a concatenation of fees, hence significantly decreasing your working media purchasing power.
Kayzen works mostly with exchanges where 100% of their inventory is direct, yet a few exceptions apply with varying degrees of indirect traffic, such as AdColony (DT), BidSwitch, Rubicon (Magnite) and PubNative (Verve Group). To learn more about this we encourage you to explore the Publisher Display Manager on Inventory Discovery, which grants visibility on the SDK that originated the bid request.
How can you navigate the complex fee scenario?
The Kayzen platform provides a significant number of campaign performance metrics. Two of these metrics can be leveraged to estimate which supply path is most efficient in terms of fees. Bid Price per Mille and Win Rate.
By looking at these two metrics across exchanges for the same app and ad format, you can get an understanding on which supply path provides the most efficient way to accees said inventory.
In the example above, we can see that even if AdSolut Exchange's Bid Price per Mille is lower than Google Adx's, its Win Rate and Clear Rate are significantly higher, yielding a significantly higher number of impressions at a lower CPM.
As such, while we don't have visibility on any of the exchanges fees, or even the number of intermediaries in between, we can conclude that AdSolut guarantees the most bang for your buck when targeting Jio Cinema Video inventory in India.