Programmatic · also called open exchange, open marketplace, RTB open market
Open auction
An open auction is a real-time programmatic auction in which any approved buyer connected to an exchange can bid on a publisher's impressions, without a pre-arranged deal.
The open auction is the public marketplace of programmatic advertising. Publishers expose inventory through SSPs and exchanges, and any DSP connected to them can bid in real-time bidding auctions, subject to the publisher's floors and blocks.
The open auction offers enormous scale and competition and is where most long-tail websites and apps are sold. It is also where the industry's biggest problems concentrate: Made-for-advertising sites, traffic arbitrage, domain spoofing, bid duplication and long reseller chains. The ANA's 2023 programmatic transparency study, for example, found that MFA sites accounted for 21% of impressions and 15% of spend in its sample, much of it bought in open-market conditions.
Buyers therefore trade in the open auction with guardrails: inclusion lists, supply path optimization, pre-bid filtering and checks against ads.txt and sellers.json. Many shift budget to PMPs and curation.
Think of it like this
The open auction is like a huge public flea market: great bargains and real treasures, but also fakes, so experienced buyers check the goods.
An example
A mobile game advertiser buys 50 million impressions in the open auction across 12,000 apps at an average US$1.20 CPM, excluding 3,000 apps flagged for high invalid traffic.
Related terms
Real-time bidding (RTB)
Real-time bidding (RTB) is an automated auction in which advertisers bid on a single ad impression in the fraction of a second while a web page, app or stream is loading.
Private marketplace (PMP)
A private marketplace (PMP) is an invitation-only programmatic auction in which a publisher lets a selected group of buyers bid on specific inventory, usually with a floor price, via a deal ID.
Remnant inventory
Remnant inventory is ad space a publisher has not sold through direct deals, which is then offered through programmatic channels, networks or house ads, usually at lower prices.
Supply path optimization (SPO)
Supply path optimization (SPO) is a buyer's practice of choosing the most direct, cheapest and most trustworthy routes to the same inventory, and cutting unnecessary resellers and duplicate paths.
Made-for-advertising (MFA) sites
Made-for-advertising (MFA) sites are websites built mainly to generate ad revenue, typically with thin content, heavy ad density, fast refreshing ads and traffic bought through arbitrage.
Sources: ANA: Programmatic Media Supply Chain Transparency Study (first look, 2023)