As mentioned, ad mediation and mediation platforms connect to multiple ad networks with a single integration. With data from each network, ad mediation is then performed using an optimization algorithm to fill an app’s ad inventory with the highest CPM possible. In short, the primary use case of ad mediation and mediation platforms is increasing ad revenue for publishers.
Ad mediation platforms initially used what’s called a ‘waterfall’ approach to ad networks in which advertisers can prioritize ad networks based on their preferences and potential ad revenue from each source. As the mediation platform ironSource highlights, ad mediation evolved to use a ‘weighted waterfall system’, which prioritizes ad networks based on weight:
The ad network’s weight is determined by the performance of one network in relation to others. This results in only the top pool of ads from each network being requested, which ensures that developers fill high-performing ads from each network first before moving on to lower paying ads.
As a result, ironSource reports that developers see an average of 40% increase in ad revenue from this weighted waterfall system.
Mediation is now turning increasingly to header bidding. While the waterfall works through one ad network at a time, header bidding sends the open ad slot to many simultaneously, increasing speed and offering a more transparent bidding process for the advertising opportunity.