Advertisers and publishers have competing goals: Advertisers are trying to reach the right audiences with the lowest possible cost while maximizing conversions. Meanwhile, publishers want to maximize the amount of revenue they generate from ads to support their operations. However, they both have a vested interest in delivering relevant, effective advertising.

An effective ROI from ads means advertisers will continue to invest, and publishers will continue to earn revenue for site monetization.

To evaluate the effectiveness of the ads and targeting, you need data … and bidstream data, short for bid stream location data, helps.

In this article, we’ll explain how bidstream data works, how it’s collected and stored, and some of the challenges in using it.

What is Bidstream Data?

Bidstream data is the information the publisher passes to the advertiser so they can make decisions on whether they want to bid on available ad units. While bidstream data does not contain personally identifiable information (PII), it does contain the information advertisers need to make bidding decisions.

Bidstream data contains:

• Site domain
• Domain of the page where an ad will be displayed
• Ad unit formats and size
• IP address
• Location data
• Device type, screen size, and resolution

Bidstream data collection occurs whenever someone visits a webpage. The website collects the user’s IP address and other data, adds information about available ad units, and stores it in a database that can be used to target and refine ads on websites.

When an ad call occurs, the bidstream data goes to the supply-side platforms (SSPs), which forwards a bid request to an ad exchange. From there, it is matched in real-time with bids from the demand-side platform (DSP). The bid that best matches the request wins the ad spot.

Then, this information is sent back to the SSP, which allows the ad to be served. All this happens in the AdTech ecosystem in milliseconds to provide a seamless experience for the user.

Bidstream data helps advertisers better target programmatic advertising buys and is effective for contextual targeting. It doesn’t just focus on a user’s history, but also includes information about what’s on the page and the ad unit itself.

How is Bidstream Data Used?

One of the most valuable pieces of bidstream data is geolocation information. This data can be used both for targeting and attribution. For example, if publishers make the bidstream data available, an advertiser could match the data to show that someone saw an ad unit for a brick-and-mortar store and then visited the store the following week.

By making sure that ads target specific audiences, bidstream data helps advertisers narrow their ad tech bids to their target buyer personas. Bidstream data helps advertisers segment audiences and focus on specific demographics and locations to find high-value customers. Also, brands can use bidstream data to evaluate the efficiency of bidding, based on performance data on specific browsers, devices, or URLs.

It’s a win for everyone. Advertisers can more narrowly target their audience and increase ad campaign performance. Publishers can improve the monetization of their site by delivering more effective advertising, which in turn makes their ad inventory more valuable.

Mobile sites and apps benefit from bidstream data as well, ensuring impressions deliver more relevant messaging. Learn more about the process in our Ultimate Guide to In-App Advertising.

The Benefits of Utilizing Bidstream Data

Not only do advertisers and publishers see benefits from utilizing bidstream data, but site visitors also benefit from seeing more relevant advertisements.

Publisher Benefits

On the sell-side, publishers benefit in a variety of ways, including:

• More effective advertising results, which can influence future buys.
• Publishers can charge more per thousand impressions (CPM) for their inventory.
• Potential higher multiples if the site is ever sold.
• Publishers may also be able to sell data to data management platforms (DMPs).

Advertiser Benefits

On the buy-side, advertisers benefit from bidstream data because it allows them to:

• Better segment users in real-time bidding (also known as RTB, one of the four types of programmatic advertising) auctions to serve more relevant, targeted ads.
• Better understand user data and behavior to increase campaign effectiveness and optimization of ad budgets.
• Gather performance data about user behavior and attribution for future campaigns without the need for third-party data tools for analysis.

The Key Challenges of Bidstream Data

There are also some challenges associated with bidstream data and how it’s used.

In-House Investments

To sift through tons of data, a dedicated in-house manager would have to monitor and manage the data that comes through, focusing on data cleansing and proper segmentation. This can require a significant investment in staff, tools, and training.

Cached IP Addresses

Bidstream data sometimes sends information from cached — rather than current — locations to execute at speed. This data may not be in real-time, so the data received may not always be up to date.

Teleporting

Data can also become confusing at a device level. For example, if users are browsing using a virtual private network (VPN), it can cause the data to become unreliable since some data is masked.

Inaccuracy

Despite the potential benefits of bidstream data, it is also notoriously inaccurate. Some studies show that the accuracy of bidstream data is around 10%, making it challenging for advertisers to use downstream without cleansing. A 2020/2021 study in the UK, for example, found that 60% of the datasets examined in bidstream were inaccurate.

Bidstream Data and Data Privacy

Still, bidstream data may be a possible solution to the blocking of third-party cookies. Some data providers use deterministic IDs based on bidstream data to minimize the use of cookies. Publishers can also opt to target based on contextual information, embedded in bidstream data, rather than relying on data gathered from cookies.

While bidstream data does not contain personally identifiable information (PII), it does contain some attributable identifiers. It still complies with data privacy laws such as GDPR or CCPA, but when third-party cookies are no longer available for use, more personal identifiers will be removed from the data stream. For example, publishers will need to have the user’s consent to show targeted advertising, which will reduce the pool of data that providers can collect in the data set.

The IAB RTB 3.0 protocol gives bidstream data more flexibility and freedom to evolve. The IAB protocol allows other identity signals to be used as cookies are replaced by other data products.

Bidstream Data In Review

Bidstream data can be incredibly useful for targeting, but there are also user privacy concerns that may require a full-time data manager or team to use it properly and cleanse it for accuracy.

Currently, it’s most commonly used to augment cookies. Once cookies are deprecated, bidstream data may play a larger role in helping publishers and advertisers deliver relevant advertising. But, it must be used properly to ensure accuracy and avoid privacy concerns.

We are an ad tech industry leader, providing publishers with optimized monetization technology, insights and analytics, and a team of AdOps experts to maximize revenue. We work to provide the highest-earning ad placements possible while still maintaining GDPR, CCPA, and other privacy law requirements.

To see how much money you could generate from your website, mobile site, or app, try our free earnings calculator.