Less Traffic, Better Outcomes: Competition-Aware Request Dispatch in Real-Time Ad Exchanges
A competition-aware request dispatch framework was deployed on a production ad exchange handling over 20 billion daily requests. In a full multi-DSP deployment, the policy reduced DSP request volume by 34.2% and increased net revenue by 4.6% (p<0.001) over a 14-day window after an initial DSP adaptation period. The system uses distributional bid prediction and probabilistic forwarding with per-DSP threshold optimization.
Researchers present a competition-aware request dispatch framework for real-time bidding ad exchanges that selectively forwards requests to demand-side platforms (DSPs) based on predicted bid distributions. Deployed on a production platform with over 20 billion daily requests, the system reduced DSP request volume by 34.2% while increasing net revenue by 4.6% (p<0.001) in a 14-day evaluation. The approach adapts per-DSP thresholds via lightweight policy optimization to handle non-stationary markets, and segment-level analysis reveals heterogeneous effects and comparative advantages.
The framework combines distributional bid prediction with probabilistic forwarding decisions, optimizing per-DSP thresholds through lightweight policy optimization. This allows the system to adapt to non-stationary market conditions without heavy retraining. The approach moves beyond simple request filtering to a competition-aware dispatch that considers the interplay between DSPs' compute and budget constraints.
Ad exchanges typically forward nearly all requests to DSPs, leading to wasted compute and suboptimal auction outcomes. By intelligently reducing request volume, the platform can improve revenue and efficiency, suggesting a shift toward more selective, value-driven traffic management in programmatic advertising. The observed heterogeneity across traffic segments indicates that one-size-fits-all metrics may hide important segment-level dynamics.
The 4.6% net revenue increase on a platform handling over 20 billion daily requests represents a significant uplift. Reducing DSP request volume by 34.2% also lowers infrastructure costs and improves DSP partner satisfaction by focusing their limited bidding capacity on higher-value opportunities. This can strengthen the exchange's market position and attract more premium inventory.
Next signals include whether other major ad exchanges adopt similar competition-aware dispatch methods, how DSPs adjust their bidding strategies in response to selective forwarding, and whether the approach generalizes to other auction-based marketplaces. Further research may explore more sophisticated policy optimization techniques and integration with DSP-side throttling mechanisms.