There has been a lot of talk over the last few months in programmatic publisher circles about Header Bidding (also called pre-bidding, advanced bidding, and tagless bidding). The point of this post is not to overview what it is, but to discuss:
- Why publishers like header bidding
- Why they use header bidding
- The Pros and Cons of header bidding
To read an in depth explanation of the technique here, read this post on Ad Ops Insider for a good overview.
To be clear we are not making any recommendation here, we are relating what we have been learning about this recent trend from our programmatic publisher friends, customers, and prospects.
HEADER BIDDING “FOR DUMMIES”:
These demand partners then pass a bid directly back to the publishers ad server (in most cases DFP).
The ad server then uses the bid as a floor price and, if DFP, generally uses “dynamic allocation” to decide the winner (against direct, RTB and Deals) and will also compete against the publisher’s exchange (in the case of DFP, AdX has the “last bite of the apple”).
WHY PUBLISHERS LIKE IT:
Publishers like it because they sell more at a higher price. This is accomplished through a few different layers:
Header Demand buys some inventory (which otherwise would have been unsold or sold at a lower price),
The header bid acts as a floor in AdX (or their primary exchange), making AdX work harder to win the auction via DFP’s Dynamic Allocation — indeed in most cases we are seeing publishers increase eCPM by 15%~25% while maintaining the same fill rate. Certainly a win for the programmatic yield manager!
WHY PUBLISHERS USE IT (Aside from the fact that it increases eCPM by 25%!)
As many of you know, media sellers are willing to try anything in the effort to eke out more programmatic revenue. In today’s complex programmatic environment, yield management is both dynamic and confusing. Header bidding as a concept is easy to comprehend and the demand is coming more directly — enabling publishers to get rid of the standard exchange ‘waterfall’ and passbacks— a cause for many debates and discrepancies. However, header bidding allows other exchanges and demand sources to compete with Ad X and keep fill rate — keeping Google honest and elevating competition.
A pain in the A@$ to set up and manage
Increased latency on page load times
Making DFP work with Header Bidding can be painful
So lets cover the PROs:
- Remove the traditional SSP/Exchange waterfall
- Eliminate passbacks
- Increase yield
- Create multiple demand sources bid on the same inventory at the same time
- Deliver cleaner and better tech integration between revenue partners
- Eliminates inefficient and wasteful swinging of inventory back and forth
Now the Cons:
- Reduced reporting fidelity
- Publisher’s trading data is blocked – obfuscating a programmatic publisher’s knowledge about competition and pricing
- Increased data leakage: all demand partners have sight on all inventory and reach and thus can develop and use a full data profile about publisher’s inventory
- Setup can be very complicated, depending on how granular a publisher chooses to be with line items in the ad server
- Long page load times and time outs as the ad server waits for replies from all demand partners
- High discrepancy rates due to page time outs and long page load times from the above