Header bidding has a video problem, for now

Ask any supply-side vendor if it plans to bring header bidding to video ads this year, and the answer is probably “yes.”

And why not? In an ideal world, video header bidding lets advertisers access publisher video inventory traditionally reserved for direct sales and allows publishers to sell more video ads at the highest price possible — all in an automated fashion.

But there are doubters. If header bidding comes to video, publishers will face the same issues, if not even worse, that they experienced in display — namely latency and data leakage. Most important, video inventory, especially long-form quality inventory, is scarce, and publishers are wary of selling it the same way they do display ads, said to Tanuj Joshi, vp of strategic media enablement for MediaMath.

“I think 80 percent of the video market is controlled by 20 percent of the publishers. Big players like Hulu have developed their own tech stack so they are not a consumer of header bidding,” said Joshi. “Header bidding will be the catalyst for more video publishers to go programmatic. But it is too early to really assess its effectiveness.”

For starters, there isn’t really even a header in video, only a player. Header bidding is written in JavaScript. The adoption of JavaScript-based video players is still relatively low — most are still Flash-based — so video header bidding is unlikely to take off at the moment, said John Li, director of supply technology for mobile software company PadSquad.

To overcome this, vendors can add header codes to video players, the same way they implement header bidding in mobile apps. And they — and some media companies — push advertisers to use IAB-compliant video player ad-serving interface definition tags to describe their ad creative in a bid request. With video, the concern is that the presence of these VPAID tags may worsen lengthy video load times. With header bidding, up to 10 transactions can occur simultaneously in real time on each page as it loads, according to Scott Braley, general manager for advertising platforms for video tech firm Ooyala.

“First we have the technical baseline where a player doesn’t really have a header. Ad exchanges like Index Exchange have implemented the logic inside the player, which is great,” said Gil Rachlin, vp of global products and engineering for open ad management firm Sizmek. “But it requires different implementation for different player technologies, which may potentially create longer load times for video ads.”

He is also concerned that the existing video header bidding solution may screw with performance measurements, giving rise to the need for a proper server-side solution that is transparent to the publisher.

Wait and see

That’s not to say that there is no value in video header bidding. Viral-content site LittleThings, for instance, started testing Index Exchange’s video header in December. While Justin Festa, the publisher’s evp of digital, declined to disclose its video CPM price, he said that header bidding helps drive LittleThings’ video CPMs by around 25 percent in initial tests.

“We are not seeing any negatives. But I only have one header partner, so I don’t have insight into other partners,” Festa noted. “Right now, I want to wait and see how video header bidding pans out.”

Meanwhile, Purch, another Index Exchange partner, adopted a server-based bidding solution for video ads to avoid latency issues. Video bidding doesn’t work as seamlessly as display and native because with video real-time bidding, publishers introduce video player as a foreign component, explained Marc Ropelato, director of programmatic revenue for Purch. The publisher managed to conquer such challenges with a self-built ad management platform that serves as a wrapper.

“Server-to-server minimizes latency,” said Ropelato. “With header bidding, publishers won’t be able to scale video with lots of header bidders if they are already running them for display and native.”

Purch is currently working with five different video demand partners, and it plans to integrate another five server-based video bidders in the coming months.

“Many are doing it wrong.”

Not every publisher is open to video header bidding though. Chip Schenck, vp of data and programmatic solutions for Meredith Digital, thinks that there is still a dearth of quality video views, so many publishers are not even making video views available at any scale in private marketplaces — most are still keeping their views for direct sales, regardless of price.

“We are not testing video header bidding currently but will when the time warrants,” said Schenck.

Ooyala’s Braley echoed the same sentiment. He thinks that header bidding is challenging for premium publishers that own long-form quality videos, and it’s critical for them to maintain intimate, direct relationships with all of the buyers.

“Header bidding is less relevant for them because they need to figure out how to manage commercial adjacency with automation,” said Braley. “If publishers only track if they make more money with header bidding, of course they will. But there are other aspects they need to think about, like user experience and data leakage.”

But Jourdain Casale, vp of strategy for Index Exchange, believes that header bidding will eventually invade the premium video inventory and help publishers get proper yield, without comprising user experience.

“I agree with all the negative things that people say about the latency issue in video header bidding. But many are doing it wrong, like they have an excessive number of partners without a wrapper solution,” said Casale. “People didn’t think header bidding would happen in display, but it changed everything. And now, it is happening in video.”


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