What is the waterfall in ad tech?
The waterfall (or daisy-chaining) is an older way of selling ad impressions in which the publisher's ad server offers each impression to demand partners one at a time, in a fixed priority order, until one accepts. Because a higher-paying partner lower in the chain might never get a chance, the waterfall leaves money on the table; header bidding largely replaced it.
In a waterfall, partners are ranked by historical average price. If the first declines, the ad call passes to the next, adding latency each time. Higher-value bids from partners further down are never seen.
On the web, header bidding and the unified auction replaced most waterfalls after 2015. In mobile apps, ad mediation platforms ran waterfalls for years before shifting to in-app bidding, though many app stacks still use hybrid setups.