June 13, 2019

With rapid changes in buying dynamics, including the pivot from second to first price auction, there’s a strong need for new buying mechanics that take the guesswork out of placing your bids. Today, we’re introducing the latest addition to our suite of buying algorithms with the introduction of Dynamic CPM (dCPM)

Dynamic CPM delivers an expanded set of optimization options that work efficiently while taking into consideration the sophisticated needs of hybrid auctioning environments such as first, second and hybrid auction dynamics. Dynamic CPM further serves as a foundation for an exciting new assortment of multi-objective optimization goals. This new family of AI driven algorithms powered by Odin, our advanced AI, will be made available through Dynamic CPM with added granular optimization options.

Live Screenshot from the Platform

While Adform’s Dynamic CPM shares some characteristics with other “bid shading” algorithms on the market, we’ve focused on creating a more strategic approach providing added control, refinement, and flexibility specifically tailored to clients’ goals.

Cost Savings

Dynamic CPM is a family of programmatic optimization algorithms that helps customers to navigate ever changing programmatic auction dynamics. Unlike similar offers from other established DSPs, Dynamic CPM can deal with multivariate optimization – both predict the optimal bid price and maximize the goal KPI.

How does it work? 

Dynamic CPM reviews billions of historical bids and related bid characteristics drawn from across the platform and our extended ecosystem. Bolstered by the rich signals we capture through our integrated advertising platform, we’re better positioned to apply our advanced machine learning capabilities to filter, forecast, and adapt to make informed bids that maximize efficiency within the criteria set by a buyer. 

Bid Shading Illustration

Dynamic CPM - like technologies, including bid shading, have become particularly popular in the last 12 months to coincide with the depreciation of 2nd price auctions through key auction mechanisms.  Where, in a second price auction environment, optimal bid price was established by two competing bids and then the selection of the 2nd highest bid+1 cent, first price auctions mandate that the pricing decision is moved earlier in the process. The need for this stems from increased complexity in auction dynamics and the overall supply chain introduced by header bidding and other like-kind setups. 

With Dynamic CPM you retain the ability to set a flexible price range with a ceiling value you’re willing to pay. But, instead of relying on the increasingly jumbled rat’s nest of the bidding landscape that might deliver the optimal second price, or might forfeit a bid to preferential or parallel buying, the system predicts potential efficacy, optimizes for lowest price with a high probability of converting, and then optimizes in real time to deliver the optimal price.  

Dynamic CPM provides added benefits by supplementing pure CPM based optimization options, with additional dynamic elements that are of increasing importance to your ad buys such as viewability and video completion rates. 

AI Empowered Excellence

Adform’s Dynamic CPM algorithm is part of Odin, Adform’s advanced AI. The algorithm is trained multiple times throughout the day using historical pricing and performance data collected for each domain, URL, placement, device, supply partner, user id, and assigned creative type leveraging data from across our integrated advertising platform.

In addition to dealing with supply data, the algorithm also incorporates campaign specific budget restrictions in order to achieve pricing, performance and pacing KPIs. As an algorithm’s performance is only as good as the data that it is trained on, this means our Dynamic CPM benefits from the robust scope of Adform’s integrated advertising platform delivering superior data insights.

Based on historical data points and statistical trends, the algorithm is able to predict the optimal bid price to submit for each auction. Optimal, in this context, is defined as the minimal price predicted to be sufficient to win a given auction. In addition, if the trader also chooses to optimize towards viewability or video completion rate, the final bid price will be adjusted by multiplying it by the probability of the display impression being viewable or the video impression being viewed to completion.

What Does the Beta Designation Mean?

While the majority of alternatives on the market focus exclusively on core bid shading capabilities for the specific goal of establishing an optimal price for CPM based bidding, we believe there’s much more potential. As a company with a special positioning due to the data, and real-time characteristics of our integrated advertising platform, we’re able to do more with our machine learning capabilities. This means that we see Dynamic CPM as far more than a pure bid shading algorithm. We see it as a powerful tool for establishing dynamic pricing tailored to the complexity and broad needs of the modern programmatic landscape.

At launch, our Dynamic CPM algorithm has the stability, capabilities, features, and effectiveness of all of our other products. It delivers performance and reliability benchmarked on par with, or better than, all other leading alternatives on the market and will deliver excellent results. As with all of our advanced machine learning driven algorithms, we also continually tweak, test, and improve the performance of the algorithm to ensure it continually increases in the value its able to deliver to customers.

However, we’re not quite ready to say it’s done because we believe there’s a better way to move things beyond the current status quo. Over the coming months, while in Beta, we’ll be testing potential hybrid environments, additional algorithms to be merged and incorporated adding alternate goals, UX enhancements, and to better discover the primary pain points clients need solved.  Throughout the Beta Dynamic CPM is and will remain free. But, as we explore new use cases, combine capabilities, and drive industry innovation through new goals while expanding advanced machine learning capabilities we reserve the possibility of revising pricing.  

Ready to Start Using Dynamic CPM?

You can start buying with Dynamic CPM from today in the Adform DSP. 

If you still don’t see Dynamic CPM (or other functions mentioned here) under your account, please reach out to your account manager or central client services ([email protected]).

To learn more about Dynamic CPM, join us for our free introductory webinar taking place June 17th at 15:00 CEST, 14:00 BST, 09:00 EST.