Publishers start testing server-based bidding for video ads

First, some needed background on what’s what. Header bidding essentially works on a user’s browser, and a publisher usually has five or six different header bidders installed. The more headers, the more load time. Server-based bidding has arisen to address slow pages. It adds a piece of code to a publisher’s page but only requires one connection to the publisher’s ad server, so it reduces the latency significantly if the publisher wants to engage with multiple bidders, according to Marc Ropelato, director of programmatic revenue for Purch.

LittleThings, for instance, plans to monetize its more than 55 million monthly click-to-play video views by selling pre-roll ads through server-based bidding, said Justin Festa, executive vice president of digital for LittleThings.

“We are not seeing any latency issues at the moment,” Festa noted. “Our videos are usually sitting inside an article and the video auction takes place on our ad server rather than pages, so we can load the Index code asynchronously.”

In Purch’s case, the publisher has developed more than 23 customized bidders that are in line with the industry protocols, and nine of them will be able to run in-stream video ads.

The downside: server-based bidding is not just a copy-and-paste setup. Ad buyers have to be integrated through industry real-time bidding protocols, which may create complexity for the whole process and lead to a limited number of buyers, explained George Levin, co-founder and CEO of ad tech firm Getintent.

Transparency is also a big issue. Header bidding lets publishers see all the bidding prices. But the reverse is true with server-based bidding: It may not negatively affect page performance but it doesn’t give publishers full access to what’s going on because auctions take place on the server side, Levin said.

“Publishers can benefit more from the classic header bidding approach but now they are deploying server-to-server integration, because latency is a big concern,” he said. “But nobody has actually proved that latency is an issue in video or tried to deal with the problem.”

Index Exchange aside, ad tech firms like AppNexus also recently introduced so-called “video header bidding” products. Levin thinks that server-to-serve integration is simply a marketing ploy by vendors to charge more ad dollars. After all, ad tech firms cannot charge a dime for header bidding because it is open source and auctions happen on the browser side.

“As auctions happen on the server side, it’s easier for them to charge money for this,” he said. “It’s kind of SSP for SSPs.”