The winners and losers of Facebook’s dive into header bidding
Facebook finally started rolling up header bidding last week, a sell-side solution that the company had been testing since last August. In conversations with Digiday, almost everyone in the ad tech community welcomed the move: Facebook now brings mobile web demand (and some video demand on desktop) to publishers that are working with Amazon, AppNexus, Index Exchange, Media.net, Sonobi and Sortable, outside of the Facebook Audience Network.
Facebook’s header bidding integration can either take place on page or on a publisher’s ad server, depending on the approved partners. It looks like a win-win situation for everyone — except for traditional supply-side platforms and Google DoubleClick ad exchange.
Below are the winners and losers of Facebook’s header bidding expansion.
Facebook bringing their demand to header bidding vendors matters to publishers because having more demand sources compete in an auction can lead to higher bids and more revenue. Many publishers need new revenue streams when it comes to mobile web, as their existing desktop stacks and partners are unable to recreate the yield in mobile. This is especially challenging when a publisher has more mobile inventory than desktop, according to Dan Meehan, CEO and founder of mobile software PadSquad.
“FAN lets its advertisers find targeted consumers who are matched with Facebook data on the mobile web,” said Meehan. “This drives quality CPM demand at scale for publishers and the header bidding partners who provide the connections.”
Among the six initial partners working with FAN on header bidding, Amazon is perhaps the most interesting one. As it is becoming a bigger player in ad tech in its own right, it needs Facebook’s demand to feed all of its existing publishers and attract new publishers.
Ad tech firm GetIntent’s March survey of Alexa’s top 1,000 websites shows that only 121 of them have adopted header bidding. Among those 121 publishers, around 42 percent are using header bidding solutions provided by Criteo, nearly 24 percent by Amazon. So there is much untapped market for Amazon. The e-commerce company reportedly developed a cloud-based header bidding solution last December to compete with Google.
The partnership with Facebook also fits into Amazon’s strategy to move publishers to server-side bidding, according to PadSquad’s Meehan.
“Header bidding is known to have a latency issue. Given mobile speed and mobile yield, Amazon has made big investments in the server-side business,” he said. “It will be interesting to see how FAN reacts to the pending move to server-to-server auctions.”
The value of the inventory found in SSPs declines when there are other sources bringing that inventory to the auction. FAN bringing its inventory to header bidding will increase the supply in the auction, which could reduce publishers’ demand for SSPs.
“SSPs may become a channel only for remnant inventory,” said George Levin, CEO and co-founder for GetIntent.
Facebook and Google are, together, eating up 99 percent of every new digital ad dollar. So Facebook’s header bidding integration is a direct swipe at Google, which created the waterfall.
In response, Google is ramping up its header bidding alternative. It reportedly plans to add more tech vendors and publishers this summer to the open beta of a program that lets outside bidders to compete with Google’s own network of buyers for an inventory.
“Google is trying to fight back. At the end of the day, I’d hope that it can help publishers.” said PadSquad’s Meehan. “Lots of ad tech is focused on the demand side. It has been a tough run for publishers and they do need some help.”
Newsletter publishers cautiously plan to expand editorial and sales teams
Publishers with newsletter-focused businesses are looking to grow their editorial and sales teams this year — but cautiously, to keep spending down during a time of economic uncertainty.
Magna 2023 forecast paints a resilient U.S. market, thanks to retail media and streaming
In its latest ad forecast, Magna is expecting a resilient U.S. market this year – boosted by retail, streaming and the auto industry’s bounceback.
How agencies are shaping the future of DEI beyond their own walls
Agencies are acknowledging that diversity efforts don’t stop with their companies. In addition to improving employee representation, now agency efforts in diversity, equity and inclusion are aimed at supporting clients and external partners.
SponsoredHow advertisers are fostering more effective publisher partnerships
Michael Weaver, senior vice president, business development and growth, Al Jazeera Media Network An everyday conversation between publishers and advertisers goes like this: The publisher invites the advertiser to a meal to talk about their business, attempts to delve into specifics on what the media buyer is looking to achieve, their audience breakdown and how […]
Newsletter publishers say they continue to see uptick in revenue despite advertising slowdown
At a time when larger media companies are feeling the pressure of the economic downturn and advertising slowdown, newsletter businesses continue to be in a period of revenue growth.
TikTok’s CEO faces bipartisan skepticism in first Congressional hearing on security concerns
The hearing comes amid calls to remove TikTok from government devices and in some cases even ban it entirely.