Overview

In RTB the exchange's numbers are used for billing, and absent something going significantly wrong, the exchange's numbers should be slightly higher than the bidder's numbers. On some exchange discrepancies can be as low as 2% of spend, while on others (especially video-oriented) the difference can be as high as 10%.

FreeWheel accounts for these discrepancies automatically in our bidding algorithm to make the exchange's numbers and the platform's numbers closer than they would be otherwise.

How it Works

Here's an example without a discrepancy allowance (zeroing out the platform's fee for simplicity's sake):

• Customer spends $1,000 on exchange according to FreeWheel's data
• Exchange sends customer a bill at the end of the month for $1020

The problem that arises from this flow of data is that there can be a significant and unexpected reduction in margin at the time of reconciliation. Instead, the platform automatically applies a small discrepancy allowance when bidding:

• Customer "spends" $1,000 on MoPub according to FreeWheel's data, but the platform was bid-reducing by 2% so they only really spent $980 on the Exchange (according to FreeWheel's data)
• Exchange sends Customer a bill at the end of the month for roughly $1000, since their numbers are generally 2% higher, and the net discrepancy is closer to zero.