Overview

In Real-Time Bidding (RTB), the exchange's

calculations are used for billing

. Typically, the exchange's

billing calculations will be slightly higher than the bidder's

calculations, which leads to differences between predicted and actual spending. On some

exchanges, discrepancies can be as low as 2% of spend, while on others (especially for video

impressions), the difference can be as high as 10%.

Buyer cloud accounts for these discrepancies automatically in

its bidding algorithm to make the exchange's

billing numbers and Buyer Cloud's calculations as close as possible.

How it Works

Here's

a spend and billing example without a discrepancy allowance (

in both examples, Buyer Cloud's fee is ignored for simplicity):

• A customer spends $1,000 on the exchange, according to

• Buyer Cloud's data

• The exchange sends the customer a bill at the end of the month for $1020

As a result of this discrepancy, there can be a significant and unexpected reduction in margin at the time of reconciliation.

So,

Buyer Cloud automatically applies a small discrepancy allowance when bidding:

• The customer spends

• $1,000 on

• the exchange, but

• Buyer Cloud was

• reducing bids by 2% so they only really spent $980 on the

• exchange (according to

• Buyer Cloud)

• The exchange sends

• the customer a bill at the end of the month for roughly $1000

• since their numbers are generally 2% higher.

With the discrepancy allowance applied, the net difference between the original spend and the

exchange's bill is closer to zero.