by Kevin Hunt, Senior Director, Product Management, SpotX

You can file away “programmatic TV” and “walled garden” as last year’s buzzwords. For 2017, “header bidding” is shaping up as the word on everyone’s lips. But, as with so many of the buzzwords that have come before, it can be hard to separate fact from fiction. While there has been no shortage of articles or panel sessions on header bidding, clarity around what it is and what it allows publishers to achieve remains in short supply.

To alleviate this problem and help publishers optimize a video header bidding strategy, there are four key points that need to be understood:

• The different styles of “header” bidding and how they apply to video, which, unlike display, isn’t usually executed in the web page header at all,

• The pros and cons of header bidding versus server-to-server bidding — advanced ad servers have been able to achieve the same benefits as header bidding for years, but with greater efficiencies,

• The role of the wrapper — how to deploy header bidder wrappers to maximize demand partner connections.

• How to devise a monetization strategy that leverages header bidding and other more powerful revenue maximizing techniques.

1.) The different styles of header bidding

The benefit of header bidding for publishers is clear: competing all demand sources — programmatic and direct — simultaneously drives up yield.

Many ad servers lack the programmatic infrastructure (the mechanisms to execute concurrent, real-time bidding) that allows media owners to compete demand sources simultaneously — hence the practice of “waterfalling,” or calling demand sources one after the other. Header bidding allows a media owner to plug in the advantages of programmatic to compete direct sold and programmatic campaigns against each other. It’s a win for both the sell and buy sides — having more bidding partners drives higher yields for publishers while giving buyers more opportunities to successfully execute a campaign.

But there are different ways of executing header bidding, ad servers that can call multiple demand partners simultaneously instead of waterfalling, and, most importantly of all, major differences between video and display. In video, the mechanisms that enable “header” bidding usually reside in the body of the web page, not the header like they do in display, and can leverage JavaScript-based VPAID containers. The bidding often doesn’t occur until the user clicks the play button, which means the auction runs while the video player is loading, not while the header loads. When video header bidding is discussed by the industry, this isn’t always taken into account. That being said, let’s look at the broad concept that header bidding, and various related terms, are being used to describe — refer to our definitions below.

In general, server-side implementations give the publisher significant auction efficiencies and enable faster page load times, while still allowing the buyer to inspect and value each opportunity. This allows publishers to pass valuable information on to buyers to increase value for both parties. It’s also worth noting that server-side ad insertion — an important development as the industry looks to circumvent the threat of ad blocking — is not possible in client-side executions.

2.) Server-to-server bidding with advanced ad servers

The ability to compete multiple demand sources simultaneously had been in market for years before header bidding came to prominence. Integrated SSP and ad server tech stacks, like SpotX’s platform, were built with the tools to compete an infinite list of demand partners at the same time to return the highest bidder. These tools also come with the ability to manage demand partner latency, set price floors, allocate priority tiers to partners and honor campaign contracts.

In the video space, SSPs with a strong core in programmatic infrastructure execute “parallel ad calls” through server-to-server connections with DSPs. A direct integration such as this introduces a number of important efficiencies that client-side header bidding cannot, including:

• Reduced latency: The more header bidding partners a publisher adds, the more latency is introduced. Client-side header bidders are beholden to network connection limitations in modern browsers. Adding client-side header bidding to the decisioning process can add up to 5 seconds or more in extra load time.

• Less complexity: More code on each and every page means greater complexity for the publisher, more room for error, and a greater need for ad ops or IT support.

• Less data leakage: For every header bidding partner that sees every impression opportunity, there are more opportunities for data leakage.

• Better consumer experience: Long page load times can cause user abandonment. Savvy users may even be turned off by a website that is making too many client side http requests.

•Post-campaign execution reporting: A tight integration between server-side header bidders or SSPs and your primary ad server enables holistic performance reporting. Otherwise your ad operations teams are forced to combine metrics for multiple systems.

3.) The role of the wrapper

Header bidding is being adopted so rapidly that it required the development of a new technology to manage all the partners publishers want to add. Commonly referred to as a wrapper or container, it organizes buyers and sets rules for the programmatic auction, solving the problem holding back header bidding– — the extra code and complexity added by each new header-bidding partner.

Media owners wanting to maximize the number of demand sources competing for an impression opportunity are looking to wrappers. Working with a server-side header bidder provides fine-grained campaign and timing controls for each demand partner. But media owners often have contractual or financial reasons to maintain client-side header bidding partnerships. In this case, a mixed-methods approach is the ideal path. There are server-side header bidding partners that will integrate with your stack of client-side header bidder solutions. But, look to make sure that client-side header bidders can inject their bids into the server-side provider’s programmatic infrastructure, campaign infrastructure and auction.

4.) Devising a monetization strategy to maximize revenue

At the end of the day, as a publisher, you want technology that maximizes revenue as efficiently and effectively as possible. Using client-side header bidding solutions may help boost revenue, but will not on its own drive the highest possible yield.

To truly maximize revenue, publishers need a lightweight client-side direct integration with an advanced ad server that promotes server-side bidding. Combined, these approaches enable a publisher to participate in the header bidding activity the market is talking about, as well as execute more efficient server-to-server bidding via an advanced ad server.

Keep in mind that the additional on-page awareness of direct integrations increases the value of each ad opportunity to buyers, by enabling publishers to pass information like player size, iframes and iframe depth and the true referring URL. This results in higher average spending and reduced VPAID opt-outs by advertisers as they are more likely to bid.

In an ideal world, you’d choose a single partner that provides server-to-server bidding and allows for the integration of header bidders when required, reducing complexity and allowing you to scale. But, in the complicated online advertising world, a mixed-methods approach that helps you optimize results is often necessary. Whatever mix of providers you choose, make sure they come with first-class support to ensure the ad tech work as effectively as possible.

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