Waterfall vs In-App Bidding

Am I getting access to all impression opportunities?

Tomás Yacachury avatar
Written by Tomás Yacachury
Updated over a week ago

Last Updated: November, 2023

When developing a Supply Path Optimization (SPO) strategy, if looking to prioritize some supply paths over others, it is key to understand how exchanges are connected with the publisher's app and whether that connection will guarantee full view on all impression opportunities.

Publishers leverage a mediation platform that will allow them to manage their monetization stack, by setting up their demand partners (integrated through an SDK or S2S connection) either on a waterfall, or on an in-app bidding (also referred as header bidding or parallel bidding) instance.

The Waterfall

A mediated SDK sits in the traditional waterfall model, where ad calls are made to exchanges and networks sequentially, with their position usually determined by historical CPMs. This creates inefficiencies on both the supply and demand side.

For publishers, the waterfall does not guarantee the highest CPM, as a network/exchange lower on the waterfall may be willing to pay more than someone on a higher position for a specific impression opportunity.

For advertisers like you, this means that the current networks or exchanges you work with may not guarantee access to all impression opportunities, as in some cases, these may be on lower positions of the waterfall. Moreover, the position of an exchange in the waterfall, and thus its reach on all impression opportunities, will vary from app to app, hence there is no one exchange to rule them all.

In-App Bidding

The last few years saw the introduction of in-app bidding / parallel bidding / header bidding. In this scenario, networks and exchanges are called in parallel within a unified auction, where they submit a bid price in real time and the highest bidder wins.

This represents an upgrade over the waterfall, as the publisher gets a guarantee on the highest CPM for its impression opportunity, and advertisers get exposure to all impression opportunities through the bidding networks/exchanges.

In-App Bidding support by Mediation

The mediation space is currently dominated by 3 platforms: AppLovin's MAX, Unity's LevelPlay (previously IronSource's) and Google AdMob.

While other mediations do exist, such as Chartboost's Helium (gradually adopted by Zynga after the acquisition) or Digital Turbine's Fairbid, their footprint is on the lower end and hence most monetization stacks are mediated by these 3 platforms mentioned above.

In-app bidding support by Mediation Platform

A few important observations:

  • The fact that an exchange supports in-app bidding in a specific mediation does not guarantee that the publisher is leveraging such bidding capabilities. Many publishers argue that ad exchanges yield lower ad revenue on bidding compared to waterfalls, and hence tend to maintain a hybrid scenario with a combination of waterfall instances and bidding for some exchanges.

  • Chartboost, Unity and Fyber are bidding enabled on their respective mediations, Helium and Fairbid. It is expected for them to add bidding support on 3rd party mediation by late 2023, early 2024.

  • Amazon and Nimbus both sit outside mediation platforms. Their behavior is analogue to an in-app bidding scenario and thus still guarantee full access to all impression opportunities.

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