As it turns out, there’s more than one way to use header bidding.
Header bidding gets a lot of publicity for its ability to increase revenue for publishers. But a less-heralded aspect of header bidding is that publishers use it to prioritize certain advertisers in the auction. Publishers said that doing so encourages marketers to work consistently with them and make big budget commitments.
“People are addicted to talking about the technology and yield aspects, but we sometimes forget that programmatic is about marketing,” said Julie Clark, vp of programmatic at Hearst, when asked why the prioritization aspect of header bidding receives little attention. “Header bidding might be created as a yield tool, but it can also be used as a strategic marketing tool.”
Prioritization is done through supply-side platforms (SSPs) and ad servers. But priorities set in a SSP only apply to bids in that specific SSP. Publishers who want to set priorities throughout the entire auction do so through the ad server, said Jana Meron, vp of programmatic at Business Insider.
Sources said that ad servers can have nearly 20 different priority settings and SSPs can have over 100 priority settings. The preference levels can be set to the point that they “would allow [preferred advertisers] to beat even a direct campaign in your ad server,” said Marco Samuel, IBT Media’s programmatic account manager.
Giving preference to certain advertisers can contribute to short-term losses in revenue if this results in the highest bidder not winning. But publishers emphasized that giving preference to certain advertisers is a long-term strategy aimed at creating sustainable partnerships.
“If you look at our best customers over the last 100 years, a high percentage of them will be the same over the next 100 years,” said Chip Schenck, vp of programmatic at Meredith Digital. “So why are we sacrificing long-term relationships to eke out a little bit more yield with someone we don’t know or work with very often?”
Publishers said that by placing priorities, they can incentivize advertisers to make large upfront commitments because doing so signals that the publisher will work to get the advertiser the inventory they desire.
That’s why Meredith “lets PMPs (private marketplaces) punch above their weight class,” Schenck said. For example, a preferred advertiser in a PMP deal bidding $12 per CPM can be put on par with advertisers bidding $20 per CPM in the open exchange, he said.
While header bidding preferences might sound like a great deal to large-scale advertisers who regularly work with the same publishers, it could also come off as unfair to other advertisers who don’t do large upfront deals or regularly work with the same publishers.
Schenck said that if marketers feel frustrated by header preferences, they should work directly with publishers on campaigns. Clark added that publishers need to take their own considerations into account when giving preference to advertisers.
“To [prioritize an advertiser], we have to make sure you are bidding consistently at a certain CPM and not just occasionally,” she said.
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