There is a potentially seismic shift happening underneath programmatic exchanges, as more ad bidders experiment with placing their AI models or decision-making algorithms in cloud-based container tech that lets those decisions happen at the SSP.
Using an SSP’s container means the advertiser gets to observe and bid on a far greater amount of total SSP supply, not just what’s rationed to their DSP because both sides of the exchange must manage the costs of processing all those programmatic impressions. That’s the message of a containerized integration between Chalice AI, a custom bidding company, and the SSP OpenX.
The cloud-based infrastructure overhaul happening in ad tech has even prompted brand updates, such that Chalice AI now describes itself as “the platform-independent AI media decisioning company” and OpenX has adopted the sobriquet “The Intelligent SSP.”
Hyundai was the pilot advertiser between Chalice and OpenX of the SSP’s container product, called OpenXBuild, that launched this year.
The new containerized bidding product is a great driver of efficiency, but not the type of efficiency that’s preoccupied with getting the same item for a cheaper rate, Hyundai CMO Sean Gilipin told AdExchanger.
“Sometimes efficiency tends to become this cost savings,” Gilpin said. But he said Hyundai is more focused on finding the right pools of potential car buyers, not necessarily the lowest CPM.
He added that Hyundai will be expanding its AI-based bidding product from a test involving three models (as in, car models – the Tucson, Santa Fe and Palisade) to the entire fleet.
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Advertisers want more data from publishers than they’ve ever had before. And part of the benefit of containerization is that programmatic buyers can bid on data signals and other factors that aren’t in the bidstream.
The goal for ad tech companies like Chalice, Gilpin said, “is to get more and more partners open to allowing brands to be able to do their own custom valuation on inventory.”
That means the supply-side tech, such as OpenX in this case study, hosts the buy-side tech in a container within its own platform. But publishers and SSPs are getting comfortable with the buy-side request for greater data.
For OpenX, which is built entirely on Google Cloud Platform, the containerization product changes the cost structure somewhat, because OpenX is hosting, and therefore paying for, greater bandwidth cloud consumption. However, OpenX CTO told AdExchanger that the added costs of buyers operating containers in OpenX’s platform “is smaller than generally the egress cost of sending the bid requests out to the DSPs” in the first place. “More and more media partners are always aligned with what’s good for their ad partner in terms of performance, is always good for the publisher in terms of reoccurring investment and long-term relationships,” Gilpin said. He compared the benefit of bidding on impressions using the containerized product as akin to buying homes directly off the listings on Redfin or Zillow, without needing to spend all the time on real estate brokering, checking the roof, the plumbing, the electrics, etc. are in working order.
The container tech dramatically speeds up the process for the brand to get to the downstream result it really wants, in a media environment where clicks and signs of digital engagement are used as proxies, he said. Hyundai has its own internal metrics, which Gilpin said are referred to as “high-value actions,” that are strong indicators of someone’s intent to buy a car. But those indicators often happen in the real world, like going to a dealership to test drive a car.
The other major benefit, he said, is that with Chalice and other independent custom bidders, Hyundai still owns the IP of the targeting model built by the vendor.
The major platforms offer their own AI-based bidding products, such as Google’s Performance Max. But Gilpin said he doubts the brand “gets a unique competitive advantage with off-the-rack platform elements.”
The Chalice containerized model, which is an algorithm for bidding on ad impressions, can be picked up and used within a different SSP or even a different custom bidder, Gilpin said.
Hyundai may be happy to sell leases for its cars.
But he said that when it comes to the decision-making knowledge about which impressions, media channels and types of audiences turn into car buyers, “we want to own that.”