There is a lot of talk in the marketplace about the end of Header Bidding due to Google opening up its dynamic allocation product to outside exchange partners. Before we talk about if Header Bidding will vanish or not, it is important to understand why Header Biding was created, how it has impacted publishers and advertisers and why you should adopt Header Bidding as part of your media strategy.
Why was Header Bidding created?
This technology was created on the publisher side to allow more control and transparency on impressions sold versus relying on the ad server to determine who is getting the impression. Adx had a large advantage against other exchanges due to the relationship with Google, and other exchanges were not exposed to the same amount of impressions made available by the publishers via DFP.
There is more value in the publisher knowing which advertisers are bidding for their inventory and how much they are willing to pay for the impression.
On the buyer side, this allows the buyer to see all qualified available impression before the ad call. With the current waterfall set up it’s less transparent. The ad server determines who is getting the impression, and the buyer sees maybe a quarter of the impressions available
Why now?
Overall, the increase in investment and overall education about programmatic buying brought the competition together in the RTB world and it became more important to value every single impression bought, since quality is the main focus. On the buyer side, this is another way to purchase quality inventory. PMP (private market place), which allows buyers to access remnant quality inventory from specific publishers, became very popular amongst advertisers. Header bidding allows access to quality inventory without the hassle of the PMP set up and troubleshooting.
On the publisher side, they see an uptick in yield, so header bidding becomes even more attractive
What are some of the issues found with header bidding?
There are a few negative issues for publishers and buyers. On the publisher side, having so many tags slows the website which depletes the user experience. Also, as these impressions are showing before the DFP is called, so forecasting integrity is an issue. In addition, Header Bidding can exposes the publisher site to riskier creative as Google’s creative policies and their ad review center provide publishers control over the ads that run on their sites.
On the buyer side, the main issue is the fact that publishers are running multiple auctions for the same impression, which can lead to self-bidding and increase in CPMs.
What are the different ways publishers are using header bidding?
Header bidding is a proven driver in an uptick in yield, which becomes very attractive to publishers. Some publishers are using header bidding to increase their profits. Others are using it to understand which buyers/advertisers are valuing their inventory the highest, which gives them the opportunity to start a one to one conversation with these potential long term relationship partners.
Not all buyers are created equal and publishers want to be able to prioritize to high valuing buyers
Has header bidding given advertisers access to better inventory?
Some buyers believe that Header Bidding will allow access to top of the waterfall inventory, which it is not necessarily true. Header Bidding allows buyers to have access to all inventories, which will help to drive more scale than PMPs. If buyers are looking at buying top of the waterfall inventory, scale will be cut in half.
Also, CPMs are all over the place whereas we have seen CPMs to be higher or lower than PMP deals.
Will the Google updates to their DFP eliminate header bidding?
The ad marketplace is all about innovation and Google’s update to their DFP will help to reduce friction in the marketplace, whereas exchanges outside of Adx will be able to now compete for the same inventory.
Publishers will continue to develop their own solutions and the innovation is never going to stop. Publishers want full control and transparency to truly understand who takes priority based on how buyers are valuing their inventory.
Google will have to continue to innovate on their end to ensure they become competitive with custom solutions such as header bidding.
Why would you adopt header bidding as part of a buying strategy?
When we’re looking at buying media, particularly programmatically, we want to be certain we’re buying quality inventory. The choice of a partner should still be based on performance and what will drive the best result for the client. Header Bidding will provide more scale, but CPMs may still fluctuate a lot.
Header bidding should be used very strategically and in a way to scale PMP deals that you may already running that is currently performing well for your clients.
Having a direct conversation with the publishers is very important so that you can clearly make them aware of what you want/need as well define how this deal should be structured.