Discrepancy Allowance

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%.

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

Here's an example without a discrepancy allowance:

  • Beeswax revenue share = 0% (customer using their own seat)
  • Customer spends $1,000 on exchange according to Beeswax'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, Beeswax automatically applies a small discrepancy allowance when bidding:

  • Beeswax revenue share = 0% (customer using their own seat)
  • Customer "spends" $1,000 on MoPub according to Beeswax's data, but Beeswax was bid-reducing by 2% so we only really spent $980 on the Exchange (according to Beeswax'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.
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