Publishers and vendors gathered at Digiday’s Hot Topic event in London this week to delve deeply into the pros and cons of header bidding for both publishers and buyers, while mapping out the future of server-side bidding.
Here are the takeaways:
There’s a disconnect between buyers and publishers
A recurring theme throughout the event was how publishers can only go so far without bringing the buy side with them. Barbara Agus, Time Inc.’s digital director of international, and Dan Larden, head of global partnerships for Infectious Media, laid out their key priorities together, and it was clear there is a major disconnect between the two sides. While publishers are all too happy to integrate as many demand partners as possible to drive up competition — and consequently, yields — a big concern on the buy side is that this makes it harder for buyers to avoid bidding against themselves in auctions.
“You’re giving us access but not priority, and that’s one of the challenges we face with the shift to header bidding,” said Larden.
Buyers, like publishers, also want more transparency of the entire digital ad-trading process. “Having that transparency into why we’re not winning bids would be a massive benefit, which we’d like more of,” he added.
The right partnerships breed honesty
It’s well-known that more transparency is needed in programmatic. The Guardian has taken a hard look at its supply chain and at how intermediaries and unseen ad-tech tax have impacted fees. Daniel Spears, programmatic director at the publisher, pointed out buyers also face this issue, losing more money to transaction fees than they are spending on media. “There are too many agendas still aligned with opacity,” he said.
“If you do decide to outsource control of your ad business,” he said, “make a conscious decision who to outsource it to.”
Paul de la Nougerede, commercial product director at Telegraph Media Group, said access to unique demand, advanced product support, ad-quality tools and access to bid-level data are factors to consider when choosing a partner.
Spears also warned about freebies: “When someone offers something for free, alarm bells start ringing.”
Unique demand is needed
Eventually, buyers bidding against themselves in auctions could lead to publishers losing revenue and driving down yield. Digital-only publisher GiveMeSport is limiting the number of buyers in auctions to prevent this. “Buyers say, ‘If you can you stop us bidding against ourselves, then we can push more campaigns your way,’” said Terry Hornsby, GiveMeSport director of programmatic. “We can then offer them access to these specific bids.”
Part of this comes down to understanding what the buyer wants, including what its ideal setup is, for instance, and whether it has preferred SSPs. “Understanding what the buy side wants has been ignored for too long. Publishers have assumed they want cheap reach at scale; with header bidding, we are on a more level playing field,” added Hornsby.
Waterfall is out; unified auctions are in
The collective view of publishers at the event was that the waterfall may not be dead yet, but it soon will be. The future is with a blend of header and server-side solutions because they are the tools that will get publishers closer to the ultimate goal: creating unified auctions where direct demand can compete better with auction-based ads. The Economist, though a late adopter of header bidding (largely due to it taking a long time to get internal buy-in), is one of those on this mission. Paul Alexander, director of Europe, Middle East, Africa and Asia Pacific markets for The Economist, said it is on track to achieve a unified auction within roughly 18 months.
No one-size-fits-all approach exists
As more publishers adopt header bidding, it’s become clear that there are many ways to use it. The right setup for how, and what mix of partners works, depends entirely on a publisher’s size and business model. The market is dividing between those that can afford to invest more in their own engineering teams and use open-source Prebid.js to build their own solutions, and those that rely on the engineering power and support of independent vendors or the push-button nature of Google’s exchange bidding in Dynamic Allocation service. The publishers most advanced in the space cautioned others not to use whatever model seems the most popular, but to pay close attention to which partners and solutions fit their particular business models.
Additional reporting by Lucinda Southern.