By Karsten Weide, Chief Analyst
Yet another migraine is coming advertisers’ and AdTech vendors’ way. In late August, Prebid, a publisher organization, modified the way Transaction IDs (TIDs) work, which will increase how much money publishers make for any given advertising inventory, but will increase prices for advertisers, and make vendors’ lives more complicated (and more expensive).
(Prebid is a publisher organization providing tools to increase revenue yield in header bidding, i.e., how much money per impression they make.
TIDs serve as a unique identifiers for each ad impression auction in header bidding environments – Prebid’s domain of expertise, where publishers simultaneously solicit bids from multiple demand sources in real-time before their ad server selects the winning ad, thereby maximizing revenue through heightened competition for inventory.)
Before, a given piece of inventory that publishers solicited bids for carried the same ID no matter which advertising exchange it passed through.
Under the new framework, TIDs are no longer shared across ad exchanges; instead, each exchange receives its own isolated identifier. This adjustment, framed as an enhancement to privacy and yield optimization, carries significant ramifications for publishers, advertisers, and the broader marketplace. Below, I outline the key effects and explore potential future trajectories, drawing on insights from early implementations.
Enhanced Revenue Potential for Publishers By Hampering Price Discovery
Publishers integrating Prebid stand to benefit substantially from these TID changes through elevated auction clearing prices. The mechanism at play is straightforward: By isolating TIDs per exchange, the system cripples the marketplace’s ability to establish the fair value of advertising inventory.
Previously, demand-side platforms (DSPs) across exchanges could reference a unified TID to identify and avoid duplicate bids, moderating their bid amounts accordingly. This cross-exchange visibility often tempered competition, as buyers recognized overlapping opportunities. With TIDs now siloed, however, each exchange appears as a discrete auction pool. Buyers, lacking this broader context, are compelled to bid more assertively to secure inventory, simulating a more constrained supply.
Prebid publishers argue that their adoption of the new TID regime is about protecting privacy – an attempt to justify a change that clearly benefits publishers at the expense of market efficiency. It’s hard to take that claim at face value when the real driver is revenue: early data from implementations show yield gains of 5% to 15%, depending on configuration and vertical.
The Trade Desk’s CEO Jeff Green has called the move desperate and dangerous. But in truth, publishers are desperate. AI search and chatbots are already siphoning traffic away from their sites, cutting into sales. And within just a few years, autonomous or semi-autonomous shopping agents will only deepen the problem by further reducing human-driven Internet traffic.
Reduced Marketplace Transparency: Challenges in Valuing Inventory
Programmatic advertising thrives on the ability to assess true inventory value through observable auction dynamics. Shared TIDs facilitated this by providing a window into competitive activity across exchanges, enabling informed pricing decisions.
In the absence of such visibility, the marketplace becomes opaque. Buyers must navigate auctions without insight into whether an impression is being contested elsewhere, complicating efforts to determine fair market value. This uncertainty fosters overbidding as a precautionary measure, potentially inflating CPMs by 10% to 20% above intrinsic worth in multi-exchange scenarios.
For brands and agencies, the result is diminished efficiency: Ad spend may yield worse returns as prices decouple from underlying demand signals. Over time, this could distort inventory valuation standards, prompting a reevaluation of programmatic pricing models to restore equilibrium.
Operational Inefficiencies: The Impact of Bid Duplication
Compounding these issues is the emergence of bid duplication, an unintended consequence that introduces measurable waste. Without a shared TID for deduplication, DSPs may submit multiple bids for the identical impression across exchanges, unaware of overlaps.
This redundancy manifests as inefficient spend. Publishers may capture this excess as incremental revenue, but for advertisers, it represents a direct erosion of return on advertising spend (ROAS). Mitigation via DSP-specific deduplication tools is possible, but these tools have yet to be developed, amplifying near-term disruptions.
Looking Ahead: Responses from Vendors and Advertisers
Anticipating the trajectory over the next 6 to 12 months, AdTech vendors are poised to innovate in response. We can expect rapid development of TID-resilient solutions, such as encrypted signaling protocols (e.g., anonymized hashes for deduplication) and machine learning-based auction forecasting to approximate cross-exchange insights. Major players like The Trade Desk and Google DV360 are likely to prioritize proprietary enhancements, while the IAB Tech Lab, which has denounced the change for disrupting price discovery, may convene to address interoperability concerns, potentially advocating for standardized extensions in OpenRTB protocols. Prebid’s leadership has signaled openness to refinements, suggesting hybrid models – such as optional shared TIDs – could emerge to balance privacy with functionality.
On the advertiser side, proactive adaptation will be essential. Forward-thinking teams are already conducting Prebid audits to optimize bidder configurations and reduce duplication risks. Many are pivoting toward supply-path optimization (SPO) strategies, curating preferred exchanges to minimize fragmentation, or bolstering first-party data utilization for resilient targeting.
In summary, Prebid’s TID modifications increase publisher revenue yields, but increase advertising costs. The new scheme introduces transparency deficits, pricing distortions, and efficiency losses that demand collective action.
Perhaps, given the overwhelming might of walled gardens versus the open Internet, the solution is not to fight over scraps, but to find closer collaboration between independent publishers and vendors, opposing the Internet giants.
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