What is a Daisy Chain?

In digital advertising, a daisy chain is a series of ad servers and ad exchanges that are connected in a predetermined sequence. Also known as waterfalling, daisy chaining is a technique utilized by publishers who display ads across multiple platforms, as it enables them to optimize their ad inventory and maximize revenue.

How does daisy chaining work?

Daisy chaining works by connecting ad servers in a set sequence, with the publisher typically using a supply-side platform (SSP) to determine the order of networks, set rules, and create the chain. When the chain is set up, advertisers on the first ad network in the chain get priority when bidding begins.

In programmatic advertising, the bidding process begins when a user visits the publisher’s platform. An ad request is then submitted to the first ad server. If that server cannot fill the space with an ad that meets the publisher’s criteria, the request is then passed on to the next server in the sequence, and this continues until the end of the chain if a suitable ad cannot be displayed.

What are the advantages of daisy chaining?

Daisy chaining can offer a range of benefits to publishers looking to make the most of their ad inventory. The following are some key advantages of the technique:

• Higher fill rates: By linking a series of ad servers or exchanges together, publishers can have a backup measure in place in the event that their preferred servers cannot provide suitable ads. This enables them to increase fill rates, reducing the likelihood of ad space remaining vacant.
• Optimized revenue: Using the daisy chaining technique allows publishers to give priority to the highest-paying demand sources without precluding them from accepting other bids. Should the preferred demand source fail to serve an appropriate ad, the publisher can still fill the space at a lower price point so as to maximize revenue in every eventuality.
• Control: Daisy chaining with an SSP allows publishers to access a wide range of demand sources and change how they prioritize them. This gives them a high degree of control and flexibility in how they manage ad inventory so they can adjust their approach to improve targeting and ad performance.

What are the disadvantages of daisy chaining?

While daisy chaining can have real benefits for publishers, there are also some drawbacks that must be taken into account. These include the following:

• Complexity: Setting up and managing an effective daisy chain can be a complex process that requires continuous monitoring and adjustment. This requires considerable expertise and can be time-consuming if repeated adjustments are required to optimize ad performance. 

• Increased latency: Passing ad requests along the daisy chain increases the amount of time the publisher’s platform needs to load an ad. This can potentially impact the platforms’ performance or user experience.
• Potential for revenue loss: In instances where the networks on the chain take too long to respond to ad requests, bids may be missed. This can result in ad space going unfilled, which means the publisher loses potential revenue.