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Getting Ahead of Header Bidding

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Posted by Eric Arline on June 29, 2016
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Inventive advertising technology continues to surface as the mobile tidal wave builds momentum. Programmatic, private marketplace, native and real-time bidding are all important AdTech innovations that are here to stay.

One of the more topical innovations, header bidding, which aims to eliminate the price tiers & inefficiencies associated with the traditional ad server “waterfall,” is far from taking a bow, but it also doesn’t deserve a standing ovation.

Header bidding is a programmatic technique where publishers offer inventory to multiple ad exchanges simultaneously before making calls to their ad servers. Its main goals are to eradicate the dreaded advertising waterfall and solve the thorny issue of automating digital advertising. While header bidding succeeded in opening the floodgates to all of a publisher’s bidding partners, some experts still consider it waterfalling by a different name.

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Still want to bite the header bidding bullet? Google may have bearhugged header bidding into submission last April when it let outside bidders compete simultaneously with its own network of buyers. Andrew Casale, president and CEO at Index Exchange, said in a recent AdvertisingAge article that this development may be "the death of header bidding." Let's explore the subject in more detail before we sound the death knell.

How Header Bidding Works

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Header bidding claims to deliver a slew of improvements over the current status quo of digital advertising while masking its pitfalls. The main driver in its adoption is the promise to flatten out the waterfall. It does deliver more bids at once - but the snag is that you must pay high upfront costs and dedicate 100x more work to traffic this implementation. We should also mention that header bidding was created for web advertising, so it has very limited integration within apps.

Dynamic Demand: Ahead of Header Bidding

In an effort to decrease latency caused by the waterfall effect, Smaato set out to create Dynamic Demand. Reducing page bounces, timeouts and network errors keeps publisher revenue streams growing and advertiser ads showing. Dynamic Demand achieves this by programmatically delivering TrueCPM ads inside the server, giving the publisher complete control over the exchange. We’re the first to deliver this totally transparent and unbiased solution to dam the waterfall. 

 

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Since Dynamic Demand is server-side, it simultaneously runs auctions and performs decisions, thereby economizing on crucial milliseconds and beating header bidding to the ad response by design. All Dynamic Demand sources are continually and individually compared and prioritized to each and every eligible impression, ensuring maximum yield. We also invest a great deal in weeding out fraudulent advertising that provides lucrative monetization and high user engagement for mobile publishers.

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Header Bidding

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Dynamic Demand

  • Lost impressions because of
    increased latency
  • Revenue risk despite yield
    advantage, buyers can lose
    interest due to individually
    reduced win rates
  • Ignores apps, so does not work for apps
  • High upfront costs to integrate
    header tag
  • And more: data leakage, poor
    ad attribution
  • Revenue lift by bringing competition to ad server level and increasing transparency
  • Deal flexibility gives control to publishers because all deals (Direct, Ad Exchange, Networks & Private Marketplace) compete at-price
    within the ad server
  • Mobile-first - manage mobile web and in-app traffic
  • Deal IDs - create programmatic IDs across both mobile ecosystems

 

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With Dynamic Demand, publishers fill their inventory more reliably, and 
advertisers get honest placement of ads based on their bid.

 

  

By and large, you can’t afford to lose revenue with overpriced, slow-moving and headache-inducing header bidding. Publishers today should insist upon a highly competitive ad exchange that provides transparency, speed of ad delivery and, most importantly, increased revenue. 

 


 

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Written by Eric Arline

Eric is Smaato's Content Marketing Lead. He leverages several years of B2B marketing campaign experience to manage many of Smaato's key content-related activities in the Americas.

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