Header-bidding tech should be free. An open letter to publishers
by Andrew Rutledge, VP Sales, Publisher Technology Group, AppNexus
If you’re a digital publisher or app developer, chances are you’ve been approached by numerous ad tech sales teams in recent months, each extolling the virtues of header bidding. How do I know this? Well, I run North American sales for AppNexus. (If we haven’t spoken, I’ll be in touch next week!)
By now, many market participants leverage header bidding to directly access multiple demand sources and maximize yield. For example, the Guardian recently spoke openly about how they are testing header bidding to improve advertising yield by striking the right balance between working with the right number of demand partners without detracting from the audience experience. Livingly Media earned an impressive 10% incremental revenue growth following their implementation of the product. Simply put, publishers who use header bidding can make more money.
Because we believe strongly in creating a better Internet for all market participants, AppNexus has open-sourced its head-bidder wrapper and offered to transfer custody to the IAB. By its very definition, header bidding is designed to bypass the opaque and expensive systems that we believe benefit Google and other closed platforms at the expense of their publisher clients. As such, this technology should be available to everyone, free of charge.
Indeed, AppNexus’ Prebid.js has now been deployed by over a hundred publishers of all sizes. The Prebid.js open source project now has over 30 active contributors, including many of the leading SSPs and dozens of publishers. Header bidding works and is rapidly gaining scale as the new standard for publisher monetization.
Ironically, we’ve found that some ad tech companies have turned this argument on its head. They argue that it’s disadvantageous – even risky – to install an open-source wrapper.
Before you let someone convince you to pay for technology that’s already available for free (via Prebid.js and Yieldbot’s PubFood, among others), here two major considerations to bear in mind:
Open Source and Service Go Hand in Hand
Some companies that sell proprietary header bidding technology claim that open-source solutions offer poor service and maintenance. They argue that while open-source technologies can be easily installed, open-source vendors don’t help their clients and partners learn to use them or provide the necessary troubleshooting should an error occur. This argument falls apart on its own logic.
It’s true that successful, open-source technologies require dedicated product and engineering teams to maintain, update, and monitor their code, just like proprietary technologies do. Take Google: even though it uses an open-source Linux kernel for its Android platform, Google still has engineering and specialist teams in place that can solve for bugs and malware. So does any SaaS cloud company that’s worth its salt.
Don’t let your vendor confuse the issue. If you don’t have an in-house team capable of servicing the product, you may need to pay for service. But you shouldn’t pay for technology that is already widely available and free.
If you are contemplating a proprietary header bidding wrapper, here are some questions to pose of and about your prospective vendor:
- Are they charging you for the technology? If so, why?
- Are they charging you for service? If so, what services are they providing?
- Are they charging you a service fee or margin? If margin, isn’t that what header bidding is designed to eliminate?
- Does this partner have a sustainable business? Are you confident they will be able to continue to service your header bidding needs over time?
Open Source Is Safe
Some companies also argue that open-source software is more susceptible to infectious malware. But here, again, open-source technologies hold the advantage over the long run.
The well-known precept of Linus’ Law posits that, “given enough eyeballs, all bugs are shallow.” While viruses and malware do pose a threat to open-source software by virtue of its transparency and malleability, the reverse is also true. Because the entire software development community understands how to write and revise Linux code, there will always be enough smart software developers available to fix any “bugs” or glitches in an open-source operating system. With an open-source foundation, companies can actually spend more time innovating and less time building the basic infrastructure.
The entire purpose of header bidding is to help publishers make more money by leveling the playing field for all demand sources. By providing a transparent alternative to the industry’s black boxes run by Google’s DoubleClick and others, publishers can regain control over their advertising businesses.
An open-source solution that isn’t proprietary or beholden to the interests of any one party just makes sense. An open-source header bidding wrapper is much less likely to favor one source of demand over another. A propriety solution could involve black box logic or a new algorithm that impacts how demand is routed—the very problem header bidding is meant to solve. Open source not only lets publishers earn more by gaining insight into the value of their inventory, it also lets them improve upon wrapper functionality by adding their own open-source code incrementally over time.
We understand the desire for proprietary secrecy in a technology sector as competitive as ours. But we also think such solutions, when carried too far and built too opaquely, can pose a significant risk to a free and open Internet.
VP Sales, Publisher Technology Group