Header bidding has quintupled over the past year, according to estimates. Its meteoric rise reflects a fervent desire across the digital media industry for a truly unified programmatic experience, in which multiple demand sources can simultaneously bid on inventory, rather than “waterfalling.” While a step in the right direction, header bidding, otherwise known as “advance bidding” or “pre-bidding”, still falls well short of the programmatic ideal, which is why Smaato has integrated competition within the ad server itself.
Header Bidding 101
The goal of publishers, quite simply, is to get the most money out of their ad inventory. One of the most common optimization techniques is waterfalling, whereby publishers offer their inventory in a single channel and if no-one buys, they move down the chain to other, lower-value channels. However, this strategy is fragmented and inefficient, with inventory and money getting lost along the way.
Publishers using the Doubleclick For Publishers (DFP) ad server have more and more integration options these days, as Supply Side Platforms (SSPs) and ad networks leverage client-side integrations over ad server integrations. The question facing publishers is: “How do I know I’m getting a fair price from Google/AdX unless I can create competition for every ad request?”
This is why header bidding has emerged as an alternative. With a piece of code in the header, publishers can put inventory on multiple ad exchanges at the same time, allowing demand sources to submit bids before the call goes to ad servers. This enables them to see the inventory on a per-impression basis.
However, there are some issues. One big problem is added latency. Mobile is highly susceptible to users navigating away if an ad is not served quick enough. Header bidding adds 300 - 600ms on the front of every ad request, which is going to penalize mobile, with its slower connection speeds, over display.
Another issue is mediating between demand partners. Having an “uber-auction” in the browser, before the actual auction, may sound interesting - but in reality, it reduces transparency and creates a nightmare for tracking down discrepancies when something goes wrong. It also increases the likelihood of data leakage, since you are sending every user to multiple ad exchanges.
In addition, header bidding raises concerns about a lack of competition. You are really only forcing competition between your SSP and AdX, yet what about your Direct sold line items? This can create some pretty complicated setups, but none of those setups are going to allow competition through dynamic allocation.
Finally, header bidding only addresses the mobile web. It will not help with app traffic.
A better alternative
At Smaato, we provide one platform with Dynamic Demand that creates the competition within the ad server, increasing transparency and providing the same revenue lift. By having Direct / Ad Exchange / Networks / Private Deals all compete at price within the ad server, we give more control to the publisher and flexibility in terms of the kinds of deals they can create.
Furthermore, Smaato is mobile-first. We allow publishers to manage their mobile web and mobile app traffic. Need to create a programmatic DealID for all of your football fans across the mobile web and your app? Smaato enables you to do that.
Publishers can gain more control and revenue by using Smaato as their primary mobile monetization platform. Through Dynamic Demand, the ad exchange competes directly with your own ad networks, as well as some of your direct line items. And now with the introduction of our Private Marketplace and Preferred Deals functionalities, you can leverage audience segments from both the mobile web and your apps in one deal.
Smaato strives to be the central monetization suite for all of your mobile inventory. We have some more interesting features and integrations coming soon that will allow our publishers even greater flexibility, no matter who their primary ad server or SSP is. Our Dynamic Demand works inside your ad server to create pricing competition through all of your sales channels, and bring you more revenue for every impression.
Overall, our highly competitive ad exchange and ad serving platform natively creates the kind of competition that is only possible in DFP through utilizing 3rd party header bidding. It’s a far more transparent, effective, and impactful approach.