Pod bidding is a feature in OpenRTB 2.6 protocol, a standard for programmatic buying and selling of ads. It provides a solution to the ad load problem in the streaming advertising market. The feature enables advertisers to bid on the first or last ads in a multi-ad break (called a “pod”) and allows streaming services to dynamically manage their ad breaks to maximize ad revenue while minimizing ad volume.
Advertisers and streaming services can use pod bidding to balance monetization and user experience. Advertisers can bid for premium ad slots, such as the first or last in a video or episode, while streaming services can adjust the composition of their pods based on advertiser demand. This dynamic approach to ad revenue and placement can result in higher ad revenue and a better user experience.
The first and last slots in a linear or streaming ad break are more premium positions due to higher visibility to viewers. Pod bidding allows streaming services to sell these positions separately, at higher prices. In addition, they can configure their pods dynamically, adjusting the number and length of ads in a pod based on advertiser demand.
Streaming services can use pod bidding to set a target ad revenue threshold for content, such as an episode. They can manage the makeup of their pods and the number of pods needed to reach this target, and then remove ad breaks once the target has been met to avoid overloading viewers with ads. This results in dynamic monetization and optimization of the user experience and ad revenue.
Several companies including Beachfront, Index Exchange, and Roku are in the process of adding support for pod bidding. The adoption of pod bidding has been slow since OpenRTB 2.6’s release in April, but its potential has been noted by industry experts as a solution to the ad load problem in the streaming market.
Pod bidding provides a balance between maximizing ad revenue and minimizing ad load for streaming services. By allowing for dynamic ad placement and revenue management, pod bidding can result in higher ad revenue and a better user experience. The feature is in the process of being adopted by streaming services, advertisers, and platforms.