Conventional wisdom holds that real-time bidding (RTB) transactions should occur within 60-to- 100-milliseconds.
As more bids compete for impressions in the open RTB ad auction environment, lower lag time between various computing outputs means higher bid completion rates. Consequently, reducing latency is a large consideration in developing RTB algorithms. Some RTB players like AppNexus address the processing challenge head on, claiming stability and low latency across their respective data centers.
Those that partner to facilitate a speedier process have turned to an unexpected entrant to the RTB space: Equinix – which has its roots as a provider of data centers. Equinix is attracting vendors like pure-play video ad exchange BrightRoll and Rocket Fuel to its ecosystem. Together with Equinix, BrightRoll has brought to market VideoRTB+, a digital video RTB offering exclusive to Equinix data centers.
Rocket Fuel has used VideoRTB+ to gauge ad response rates, and saw a 48% improvement in bid completion using the “private” VideoRTB+ instance rather than a public network connection.
“RTB is not like sending a signal at the speed of light,” said Robert Blackburn, an SVP for cloud and content at Equinix. “It’s a conversation where information flies back and forth and completing that within a hundred milliseconds is not an easy thing.”
Similarly, the ability to facilitate a bid exchange can be stymied by these latency or performance issues. Given that RTB display spend is expected to grow from $3.4 billion to $8.5 billion by 2017, according to eMarketer, the stakes are high.
Equinix fields a platform called Ad-IX – which currently has 88 exchange partners plugged in. The platform is designed to enable a high-performance interconnection between companies in the RTB ecosystem and their exchange partners.
Blackburn describes one mobile ad exchange that only completed 1.3 out of 1.8 billion bids in a day. About 500 million “don’t make it back within the [accepted] window of time, which was right in line with what we witnessed with Rocket Fuel and BrightRoll.”
He pointed to a study in which Rocket Fuel, “a very advanced bidder,” found a third of bidded ads weren’t arriving on time.
A number of exchange-based companies are solving this by essentially “bypassing the use of an Internet [cloud] service provider and have their computers talk to each other directly,” Blackburn said.
“A lot of companies are using a public cloud service or hosting provider, and they are the ones that are having to look at making additional investments in private cloud to reach maximize performance,” he said. “We’re seeing the emergence of a ‘hybrid’ cloud model, [which combines private and public cloud services], which is not only happening in RTB but in other segments as well.”