Hear from execs at The New York Times, Thomson Reuters, Trusted Media Brands and many others
Legacy tech can be inescapable, even for programmatic advertisers.
Although newer (and allegedly more efficient) programmatic methods have emerged since the waterfall’s glory days, it’s worth noting that the waterfall is far from dead. Some publishers have held out from header bidding — its much buzzed-about alternative — and still rely heavily on waterfalling. And others implement waterfalls through a mixed approach to sell off remnant impressions.
“The waterfall is still a good tool to maximize remaining inventory,” said Ido Pollak, CTO of ad tech firm Matomy. “There is no single magic solution that does everything.”
It’s easy to assume that the waterfall — which let publishers move their inventory from one market to the next in an effort to optimize revenue — has died. After all, header bidding was said to have replaced it by allowing publishers to offer inventory to multiple exchanges before making calls to their ad servers. And now header bidding itself risks being usurped by server-to-server connections, which move bidding actions from publishers’ pages to a server, which allows pages to load faster. But waterfalling still exists, and here’s why.
Holdouts
For some publishers, the investment of setting up and running complex header bidders or server-to-server connections just isn’t worth it. That’s why publishers such as The Financial Times and BBC have held out from header bidding altogether. Header bidding and server-to-server holdouts may become less common over time, but, nonetheless, there still are publishers holding out, and these publishers often push much of their inventory through a waterfall.
Latency concerns have been another major reason why some publishers haven’t adopted header bidding.
“There is finite space on the header,” said Jason Tollestrup, director of programmatic at The Washington Post. “If you run 100 header bidders, your page will load slowly. Running header bidding without being thoughtful about it can actually be hurtful.”
Mixed methods
Tanuj Joshi, vp of programmatic partnerships at MediaMath, said that publishers sometimes use a variety of methods to fill their inventory. So even if a publisher sells most of their programmatic inventory through header bidding, the waterfall can still be used as a backup method to sell remaining impressions.
Thought Catalog is one publisher that complements their heading bidding with a waterfall.
“Our reason behind this mixed strategy is we only have a few header partners integrated at the moment, and we still need a way to monetize 100 percent of our inventory,” said Cristina Calderin, Thought Catalog director of programmatic. “The waterfall comes in handy for that, to help us backfill. … Header bidding is certainly a smarter way to buy and sell inventory, but it’s not always feasible to include enough [header-bidding partners] that they buy up all of a publisher’s impressions.”
Tech lingers
Sources noted although advanced techniques like server-to-server are becoming more popular, header bidding is still early on the radar for some publishers. Sources also noted that many technologies (e.g., ad networks, banner ads) stick around long after a more efficient replacement becomes available, and the waterfall is not exempt from this trend.
“I’m skeptical [that the end of the waterfall is near],” said Julie Clark, vp of programmatic sales and strategy at Hearst. “Because people will still find that [antiquated] market.”
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