The rise of header bidding created a splash in the industry—it countered Google’s then-biased ad exchange, but was wrought with complications that even server-side technology couldn’t fix. Noam Neumann, VP Mobile Strategy at Matomy Media Group says that it might be time to rethink the future of header bidding technology in the ongoing war between header bidding and Google
Header bidding is all that anyone seems to be talking about these days. Designed to take on Google’s biased ad exchange—header bidding appeared to be a saving grace for publishers and seemed to give them a competitive edge. Even with its initial success, header bidding is a passing fad, on its way to becoming obsolete. And, after hitting a few road bumps, Google is primed to win the header bidding war.
The Header Bidding Band-Aid
One of the main reasons for the birth of header bidding was to counteract Google’s Double Click for Publishers (DFP). The ad server estimated what outside supply sources would bid, but gave preference to bids from Google’s ad exchange (AdX). Last April, Google responded to the rise of header bidding by beta-launching a product called Exchange Bidding, which opened its DFP to outside demand in order to ensure greater competition within its ad server.
In parallel, publishers focused on improving their existing header bidding capabilities, such as open source or proprietary wrappers that would allow a way to manage partners seamlessly. Whilst most publishers saw larger programmatic revenues by adopting header bidding, they quickly began running into technical challenges on the browser side.
Built to solve header bidding’s shortcomings, server-side header bidding offers publishers a seemingly faster solution. Running the pre-auction on a server, instead of on the browser, should reduce latency by eliminating in-out browser traffic, but a new server-side middleman makes the process just as slow as before. SSPs’ refusal to collaborate in order to protect their demand sources means that access to the market is fragmented and publisher revenue, not maximized. Possibly the most important downfall, server-side has eliminated all of the transparency that publishers were used to seeing in traditional header bidding, and they are now forced to trust that their vendors are not giving themselves advantages such as choosing to bid last.
Just a Stepping Stone
The development of header bidding was by no means a waste of time, it’s an indicator of how technology within the programmatic industry is advancing. It highlights, for example, the shift away from a waterfall mentality, one based on inefficient sequences and price maximization at any cost. In theory, it’s an improvement from the previous models publishers relied on. Unfortunately, it acts as a temporary solution to a bigger ad server problem.
Limiting header bidding’s reach is the global shift towards a mobile-first world, as mobile apps don’t have headers. While header bidding was widely adopted in the US for non-mobile web advertising, it failed to penetrate other markets with slower browsers and primarily-mobile users. What we’re already witnessing is the breakdown and adoption of parts of header bidding and server-side technologies. Header bidding in its original form doesn’t apply to mobile, but its concepts and codes can be applied to mobile, video, and other emerging platforms in order to make those markets more efficient and evenhanded.
Another reason header bidding, in its original form, won’t last is its failure to integrate with video advertisements. Video ad units that use the Interactive Advertising Bureau’s Video Player Ad-Serving Interface Definition (VPAID) guidelines don’t run smoothly with header bidding technology. Users are becoming less interested in seeing still ads and more accustomed to engaging with video, and header bidding’s technology is inapplicable to this entire category of ad formats.
Few used to think that the smaller industry players could compete with Google on the same playing field. Header bidding changed that, and from there originated the belief that Google would lose this war. The industry, however, failed to recognize header bidding’s intrinsic disadvantages such as page latency, upcoming market changes, and the media giant’s flexibility. Google has started to crack open its doors, allowing for greater competition within its ad server, and has since then seen many willing outside partners join the platform. Google and other players both big and small like Amazon, Mobfox, and more are now offering server-side bidding. As they continue to develop server-side one-stop-shop, unbiased advertising solutions with transparency for all platforms including video, they will show that header bidding is merely a stepping stone to something much, much bigger.
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