For years, companies throughout the advertising and marketing ecosystem have commiserated about the industry’s issues, namely around the lack of transparency, accountability and ability to effectively price inventory and measure results. But commiserating hasn’t fixed much, as companies in the space have executed only incremental changes to date. As the industry – from publishers and apps, to brands and consumers – increasingly rallies around the idea of greater transparency, there’s a new and increasing wave of interest around building open source in-app bidding solutions for everyone’s benefit.
Opportunities & challenges of open sourcing bidding solutions
An open source in-app bidding solution mediates the inventory offered to brands, and provides greater transparency regarding value and campaign performance.
Further, with an open source system, no demand sources are favored, giving publishers significantly greater autonomy and brands greater visibility into KPIs.
Brands are able to determine the actual value of inventory, as the bidding methodology and outcomes are available to everyone. And developers receive greater control and can work with any bidder they choose, enabling greater brand alignment and revenue opportunities.
With all these benefits, why doesn’t everyone simply open source their bidding solution? Well indeed, there are some challenges. The first is getting bidders to participate, as each platform’s solution requires resources to create and maintain.
Publishers with meaningful traction do particularly well in an open environment, as they have the marketing muscle and demand to drive interest in participating.
Further, each platform has its own special algorithm or way of doing things; it’s understandable that solution providers will be hesitant to change their mindset and make previously proprietary offerings available to competitors.
Finally, if done wrong, these solutions can be a security risk and a waste of time, energy, and resources.
And yet, open source continues to prevail
However, if done well, and with a properly thought-out strategy, open source in-app bidding solutions can be a powerful weapon in a publisher’s toolset.
In addition, open source SDKs are more developer-friendly, propelling differentiation and innovation as they enable each publisher, app or platform to deliver highly differentiated, personalized customer experiences.
If the industry rallies around open systems, it will decrease the complexity that arises when multiple ad network SDKs are integrated, with each having a different layout, format and system, not to mention constant updates on each.
Put simply, an open source reality eliminates suffocating siloes and streamlines workflows for practitioners. And enabling open source allows for the community to quickly resolve crashes or other issues, and provides greater transparency on necessary vs. elective updates.
Using open source removes the barriers of licensing fees and the learning curve around a closed proprietary language, enabling a cadre of developers to build and participate in a solution’s development and innovation.
Furthermore, innovation is less incremental and more material with collaboration and synergy. And while security has always been a concern, as some infamous and costly vulnerabilities came to light across the industry, open-source offerings have long been considered more secure than that of closed systems, in part because of the transparency of every component.
A survey from Black Duck Software and North Bridge found that 55 percent of respondents believe open source delivers superior security compared to proprietary solutions. Additionally, the superior security of open source is slated to rise to 61 percent over the next 2-3 years.
And with the ability to integrate all the demand possible, so every impression is available for equal competition, developers gain more revenue opportunities and advertisers have more transparency and flexibility for their spend. Subsequently, publishers benefit from higher average revenue per daily active user (ARPDAU).
Looking forward, as disruptive technologies such as AI and machine learning go from nice-to-have ideas to foundational necessities for digital transformation, each advertising and marketing company will need to integrate them across their business processes.
In order to remain competitive and stay ahead of the innovation curve, businesses across the industry will need to devote more funding and resources toward open-source projects in these areas.
And the use of an in-app bidding solution can be a step in the execution of an open source system that drives competitiveness, brand alignment and ultimately growth that benefits the bottom line.