With trillions of bid requests flowing across the bidstream every day, managing traffic in a way which maximizes revenue and minimizes waste can be challenging for SSPs and DSPs alike. Ten years ago, we built SmartSwitch to solve this problem – and we’ve been improving it ever since.
In its pure, unfiltered form, the bidstream represents millions of impression opportunities being passed from SSPs to DSPs every second of every day.
In short, it’s a firehose. On steroids.
It would be practically impossible – and entirely wasteful – for a DSP to listen to the complete bidstream. Not only would this require immense processing power and petabytes of storage, but it also wastes technical resources and energy on traffic a DSP doesn’t want and will never buy.
This is one reason that DSPs have QPS (Queries Per Second) limits, which restrict the amount of requests they listen to from each SSP. QPS limits mean it’s inevitable that certain impression opportunities the DSP would want to bid on won’t make it through – and that represents a missed revenue opportunity for the demand and supply side.
DSPs could just randomly filter out a certain percentage of bid requests – and some do – but by managing their QPS that way, they’d also give up a certain amount of revenue. DSPs do already filter out a lot of traffic based on device type, domain, geo, ads.txt status, and so on, but the bid volume is still too high to process without a dedicated intelligent traffic shaping tool.
It’s here that SmartSwitch comes into play.
What is SmartSwitch?
SmartSwitch is an intelligent traffic routing system that uses proprietary machine learning to filter and deliver bid requests to specific buyers based on individual DSP buying patterns. To reduce waste, SmartSwitch routes traffic so that DSPs only receive the requests they’re most likely to bid on.
The system monitors the bidstream in real-time to compress incoming SSP traffic in two ways:
- SmartSwitch leverages bespoke machine learning algorithms to only send traffic that is most likely to be bought by the DSP.
- SmartSwitch reduces total bid request volume so that it fits into the maximum DSP QPS limit without simply randomly filtering out traffic.
So, if SmartSwitch leverages historical buying patterns to decide how to filter traffic, how does the system know when buying behaviors begin to change? Simply put, SmartSwitch always sends a small percentage of QPS as ‘learning’ traffic through to the DSP untreated, which is then used to detect real-time changes to traffic or buying behaviors. If SmartSwitch observes that DSP is starting to bid on new types of traffic, it will start to send more of that type of inventory through to the DSP as part of its QPS allotment.
How SmartSwitch works
SmartSwitch is built on top of BidSwitch’s programmatic infrastructure, which connects hundred of platforms across the ecosystem and processes nearly the entire programmatic bidstream.
It listens to traffic being sent from 120 SSPs to 130 connected DSP partners via 3000 unique trading pairs – and analyzes this bidstream data in real time.
Once a DSP chooses to connect to an SSP via BidSwitch, traffic will begin to flow from the SSP and SmartSwitch will kick in immediately. SmartSwitch then analyzes 27 different parameters from the bid request to determine which opportunities will deliver the best results, including:
- User data (e.g. cookie, alternative ID)
- Inventory format
- Device type
- OS or browser
- Domain, app, or SSP
By leveraging real-world buying and winning behavior, SmartSwitch effectively maximizes the QPS sent to DSPs with the most optimal inventory available.
For example, imagine SmartSwitch sees that a DSP is bidding most on synced iOS traffic between 9am and 5pm from a set of 100 domains. In this case, SmartSwitch will begin to prioritize any traffic which matches these parameters and will send it through to the DSP at increasingly higher volumes.
SmartSwitch is also aware of any BidSwitch Targeting Groups or any dedicated filters set up on the DSP side – such as format sizes, geographies, audiences, ads.txt statuses, etc. – and will only send traffic which passes these filters. This helps to further compress traffic into QPS limits, without adversely impacting bid rates or SSP revenue.
How does SmartSwitch help DSPs?
For DSPs, SmartSwitch unlocks new opportunities to maximize outcomes for brand and agency partners:
- Listen less, win more. Because listening to the entire bidstream is practically impossible, and because listening to entirely random samples may mean missed opportunities, SmartSwitch uses bespoke algorithms and historical bid data to send only the traffic it knows is most likely to result in a yes bid.
- Maximize every trading connection. By sending only the most relevant traffic to each DSP, SmartSwitch ensures that connected SSPs are delivering value to a DSP’s agency or brand partners – all while reducing waste.
- Make the most of your QPS. SmartSwitch helps DSPs receive more relevant supply from SSPs while respecting QPS constraints, leading to greater trading results and the option to tap into even more SSP opportunities.
How does SmartSwitch help SSPs?
For SSPs sending bid requests via a one-to-many connection through BidSwitch, the benefits of SmartSwitch include:
- Maximizing your revenue opportunities. Any filtering set up on the DSP side can quickly put a dent in your bid rates, but SmartSwitch solves this by only sending traffic it knows the DSP is looking for. This makes your supply more attractive, improves bid and fill rates, and maximizes potential revenue.
- The same revenue, lower costs. With the reduced cost of sending traffic via BidSwitch, in combination with the smart routing delivery by SmartSwitch, SSPs can benefit from the same ad revenue but at a lower cost – a net boost to your bottom line.
- A reduced technical burden. Unlike juggling multiple direct integrations with DSPs, when you send your traffic via BidSwitch, you only need to send it once – saving you the raw processing costs of sending requests multiple times.
How SmartSwitch works with Deals
Because deals are usually built around specific audience or inventory segments, SmartSwitch is designed not to interfere. That said, it does operate in a couple of different ways depending on whether it’s a Private Auction or Open Deal.
For Open Deals, SmartSwitch will treat traffic in the same way as standard Open Exchange traffic. The only difference is that, if a deal ID is detected, SmartSwitch will begin to use this deal ID as one of its optimization paramters to further improve the performance of individual deals within this traffic.
For Private Auction Deals, SmartSwitch is turned off by default. DSPs are free to enable SmartSwitch for Private Auction Deals at any time, in which case the filtering applied will be the same as for Open Deals.
To learn more about SmartSwitch and how traffic is shaped and optimized, be sure to check out our BidSwitch Explained: Understanding SmartSwitch webinar.