Understanding Delivery Rate: What Programmatic Wins Really Tell You

What is Delivery Rate

Delivery rate is the rate at which a programmatic win is converted into an impression. You may be asking, “Hey, this ad request registered a win in the auction, why didn’t it turn into an impression? There are several answers to that, and the current environment where a win doesn’t turn into an impression has moved from “there’s a problem” to “this is expected. Why would a win not deliver as an impression?

Previously, delivery rate exposed a variety of technical situations. For example, if an ad server queued a lot of ads in advance and a listener disconnected, those wins would be dropped and delivery rate would, too. Sometimes it exposed issues; for example, if an ad server had many timeouts sending ads to the delivery server, those impressions would also be dropped. Today, however, wins are dropped for reasons that are by design, not technical shortcomings:

Secondary Auctions

Many publishers today aggressively look for more demand by linking their supply-side platform (SSP) or ad server not just to demand-side platforms (DSP), but to other demand sources like external SSPs and ad servers. The result is that there is no longer just one win. There are two wins. The SSP will send out auctions and register a win. It then sends it to the publisher, which compares that win with the other demand sources attached to its yield-optimized ad server or internal SSP. That secondary auction then picks a winner from the winners. All the “losing” wins are then dropped, and no impressions are logged. As a result, the originating SSP's delivery rate drops.

Secondary auctions are very common today in ad networks, large publishers, and many ad servers. Linking a variety of demand sources maximizes revenue for publishers. But it also hurts delivery rate on programmatic auctions. As a result, delivery rate as a metric has very little value.

Multimedia Inventory

Multimedia inventory also leads to dropped wins for the same reason as secondary auctions, but for a different reason. In multimedia inventory, as you see in mobile apps and places like Spotify, where the same inventory position can place a video ad or an audio ad, they run two auctions: one for video and one for audio. They then pick the highest CPM for that slot. As a result, as above, wins get discarded, and delivery rate decreases.

Header Bidding

Header bidding means the SSP sends a group of auctions to DSPs at the same time, rather than a single auction. The result is that the inventory can be utilized much more efficiently and yield-optimized for maximum revenue. This isn't a secondary auction, but the impact is the same: The SSP pulls in a bunch of wins to fill inventory better, while discarding unused wins. Again, the result is that delivery rate decreases and is not indicative of problems.

What is Delivery Rate good for then?

Delivery rate as a performance metric today has little value. A low delivery rate is often normal, depending on how the demand and supply sources are linked. However, it can still be effective for isolating issues when it changes. For example, if you are a demand partner with an inventory owner, and their delivery rate drops, you have a good indication that they are managing their inventory differently. It doesn’t mean there is a problem, just that something may have changed.

And essentially that’s the new role of Delivery Rate as a metric. Monitor it for changes in supply. That change may not indicate a problem at all, but it may be something worth following up on. And it’s important to note, you should expect variations in delivery rate, as supply may go up and down in secondary auctions and header bidding based on the competitive landscape of those multiple demand sources.

Summary

In the end, delivery rate isn’t a metric to use to isolate problems or to use as a KPI for performance. Use revenue and impressions for that. Monitor delivery rate for changes, which may indicate a shift in supply inventory handling.