Key Points

  • Embrace Bid Shading and Traffic Shaping: These strategies refine the ad buying process for efficiency and quality, benefiting both advertisers and publishers while streamlining the digital ad ecosystem.
  • Focus on Sustainability: Adopting bid shading and traffic shaping can reduce the digital advertising industry's carbon footprint by decreasing energy consumption and computational demand.
  • Avoid Ad Arbitrage and MFA Websites: Prioritize ethical advertising practices to maintain content quality and brand safety, steering clear of risky players such as Made-For-Advertising sites.
  • Partner with Playwire: Leverage a partner, like Playwire, for our expertise and ad tech solutions to navigate the evolving digital ad landscape, ensuring strategies are profitable, environmentally responsible, and aligned with industry trends.

There are two buzzwords every publisher, creator, and advertiser should have on their radar as we kick off 2024: bid shading and traffic shaping. They’re not necessarily new terms, but they are beginning to change how digital ads are bought and sold. So, if you don’t already understand what they are, you’re in the right place.

Oh, and don’t forget the elephant in the room — the industry’s digital carbon footprint.

Every ad impression, every click, and every page loaded has an environmental cost. So, what do bid shading and traffic shaping have to do with turning ads green? And more importantly, why should publishers, content creators, and advertisers care? Let’s unpack it all together.

-- Article Continues Below --

Ad Yield Management Resource Center

Check out The Complete Ad Yield Management Resource Center

Understanding Bid Shading and Traffic Shaping

The digital advertising world is filled with new and novel terminology. You’re probably aware of the basics, but there are always new terms on the horizon. 

Today’s new-ish terms? Bid shading and traffic shaping. 

Need to familiarize yourself with each? Don’t worry; we’re here to break it down for you. Let’s start with bid shading.

Bid Shading

While it sounds like something out of a spy novel, it’s actually a clever compromise to the high-octane world of ad auctions. Before we dive in, though, a quick primer: in a first-price auction, the highest bid wins and pays the full bid price. In a second-price auction, the highest bidder wins but pays just a touch over the second-highest bid. 

Bid-shading? It splits the difference. It’s like a savvy shopper haggling at a flea market, aiming for a price that’s just right. Not too high, and not too low. This bidding strategy helps digital media buyers avoid overpaying in the first-price auctions while staying competitive.

Now, onto traffic shaping.

Traffic Shaping

Imagine a bouncer at an exclusive club. They have the final word on who gets in. Traffic shaping? That’s the digital equivalent of this selective front door security with publishers and bloggers taking the role of bouncer.

They get choosy about the ad requests they send with a focus on serving up access to their ad inventory only to select buyers. It’s not just about being picky, though; it’s about unclogging the programmatic advertising pipeline. It means being strategic about how ad requests are sent out, like targeting specific digital devices or geo-locations. 

The result is a more streamlined process that not only boosts the chances of successful placements but also reduces the computation load.

Exploring the Digital Dance Hall

Picture the digital ad marketplace as a bustline dance hall. This is the place where publishers and advertisers tango in a complex rhythm of bids and impressions. 

Not too long ago, this dance hall was an intimate affair. Publishers would partner exclusively with a single exchange or SSP — their chosen dance partner. But that was then. These days, the dance floor has become quite crowded.

Google’s entry with its ad network and ad exchange introduced a competitive twist. The result? More potential dance partners on the floor. Publishers, eager to maximize their ad revenue, started dancing with multiple partners. This packed space led to a significant challenge: inefficiency. 

With more partners in the mix, the dance became less about grace and more about competition.

Exclusive partnerships gave way to a frantic environment where multiple SSPs often bid against themselves for the same ad impression, driving up costs and complicating the entire buying process.

The Impact of Duplication

In this crowded dance hall, multiple SSPs and partners bidding for the same impression create a problem. Dancers are stepping on each other's toes, and everyone insists that they lead.

This redundancy not only throws off the rhythm of the floor but jacks up each bid price.

The infrastructure required to manage these overlapping bids and the computational resources they need is massive. Yet, the improvement in ad performance or revenue for publishers is marginal at best.

For advertisers, this means bids are spread thin across multiple platforms. It’s like throwing a thousand darts at the board to hit the bullseye. 

You might get it, but that’s a lot of darts — and a lot of waste.

This process results in higher operating costs, which ultimately trickle down to publishers in the form of reduced ad spend or lower CPMs.

-- Article Continues Below --

Spelling Bee Solver Case Study

Learn how Spelling Bee Solver saw an immediate 20% revenue uplift by switching monetization partners

Comparing Traffic Shaping and Bid Shading

Okay, it's time for a quick recap. Traffic shaping is all about controlling the guest list for the dance. Publishers decide which type of traffic gets an invite. This could be based on geography, first-party data, site quality, you name it. 

This process ensures only the best and most relevant traffic makes it to demand partners.

Bid shading plays an equally important role. It’s not necessarily about who's dancing but how the dance is priced. In this first-price auction world, the bid shading algorithm steps in like a shrewd negotiator, finding a middle ground between the highest bid and what traditionally would have been a winning second-price bid.

Bid shading is about managing who gets to bid for a dance. Publishers control which DSPs, SSPs, and ad exchanges get a chance to bid on their ad inventory. 

It’s like choreographing each dance move for a more effective performance. It reduces the clutter of duplicate bids and ensures low-priority partners are matched with lower-quality inventory.

The Case for Adopting Bid Shading and Traffic Shaping

So, why should publishers and advertisers care? Well, adopting bid shading and traffic shaping isn't just a matter of keeping pace but about taking proactive steps toward efficiency and sustainability. Let’s dive a little deeper:

  • Efficiency in Header Bidding: Strike a balance in the auction process and prevent advertisers from overpaying. It’s like fine-tuning the financial engine of the advertising world.
  • Optimize Performance: Managing which DSPs and SSPs get to bid on specific inventory allows publishers to control the quality of ads displayed on their site. This can help them better align with content and advertising goals.
  • Quality Control through Traffic Shaping: When publishers filter out lower-quality or irrelevant traffic, they ensure their inventory is safe, and quality, which can attract higher bids and create a more lucrative ad environment.

Reducing the Industry’s Carbon Footprint

Digital advertising requires a complex network of servers, data centers, and digital tools, all of which consume resources. Cooling these servers and digital data centers accounts for 40% of the energy consumption alone.

Here’s a fact: the “cloud,” the server infrastructure that powers industries like digital advertising,  consumes more energy than the airline industry.

By adopting bid shading and traffic shaping strategies, the industry can take steps toward reducing its digital carbon footprint in a few ways:

  • Reducing the number of unnecessary bids and traffic can decrease the computational power required and lower consumption.
  • Efficient strategies in favoring quality over quantity can encourage a more sustainable approach to digital advertising.

Risks of Ad Arbitrage and Made-For-Advertising Sites

If these strategies are the good guys, ad arbitrage and Made-For-Advertising (MFA) sites are the bad guys. Let’s touch on these topics real quick.

Ad Arbitrage

Ad arbitrage is the practice of buying website traffic to generate higher ad revenue. It can be lucrative but super risky. It leads publishers down a dark road where quantity outweighs quality, which, as we know, is a recipe for disaster in the world of SEO and monetization of any kind.


Made-For-Advertising websites are those that are designed to generate ad revenue, often at the expense of content quality. There is no denying that they offer high traffic, but they also pose a risk to advertisers in terms of brand safety and may contribute to a negative user experience. 

Playwire’s suggestion? Leave these tactics in the trash where they belong.

Walking the fine line between revenue and quality can be hard, but don’t sacrifice your ethics for a quick buck. The long-term result is never a positive one.

Get Ahead of the Curve with Playwire

So, there you have it. A crash course on all things bid shading and traffic shaping. Now that you’ve got these terms jostling around in your head, you’re better prepared for the future of online advertising. 

Of course, you don’t have to go it alone. Here at Playwire, we’re committed to offering ad tech solutions that align with the industry’s move toward efficiency, quality, and sustainability. When publishers and advertisers leverage our expertise, they’re able to navigate these changes with strategies and tools that aren't just effective but also environmentally friendly. 

Get in touch with the team today to learn more about how we can help you maximize your revenue.

Contact Us