quick readsHEADER BIDDING

02DIGIDAY | WTF is Header Bidding

03 WTF

Header Bidding

04 Over

the Waterfall

05 Header bidding

is your barrel

07 Rising above

the current

09 Barrel

Building

12 Potential

Leaks

14 Life beyond

the falls

TABLE OF CONTENTS

03DIGIDAY | WTF is Header Bidding

HEADER BIDDING, IT’S THE LATEST BUZZWORD ON EVERYONE’S LIPS AND WITH GOOD REASON. Unlike many so-called publishers’ solutions, header bidding is a real solution that takes on a real problem. Conceived as a hack to help level the playing field between publisher and advertiser, it’s rapidly becoming a standard practice among publishers looking to steer clear of the RTB waterfall and grab their fair share of programmatic revenue.

So what is it? In this guide we’ll explore the origins of header bidding, figure out how publishers are putting it to use, tackle some of its major challenges, and take a look at the future of the practice.

Pay attention, header bidding class is in session.

WTF HEADER BIDDING

04DIGIDAY | WTF is Header Bidding

YOU CAN’T TALK ABOUT HEADER BIDDING WITHOUT TALKING ABOUT “THE WATERFALL,” a concept that’s just about as ominous for publishers as going over Niagara in a barrel. It refers to the standard publisher practice of offering up impressions to a descending series of demand sources in order of value. Publishers call on one exchange after another looking for desired CPM.

The result is a race to the bottom as publishers bounce from one exchange to the next cashing in their precious impressions for lower and lower prices. Publishers rank exchanges in terms of how likely they are to deliver a high CPM. The better exchanges end up at the top of the waterfall, lesser exchanges near the bottom.

And not all the exchanges are playing fair. Ad exchanges need publishers and advertisers in order to operate, but only the demand side is showing up with cash.

The end result is publishers tumbling from one demand source to the next, usually winding up closer to the bottom than they’d like. A far cry from the programmatic Shangri-La of revenue efficiency we were promised.

Further ReadingGoogle’s header bidding competitor is no game changer

OVER THE WATERFALL

05DIGIDAY | WTF is Header Bidding

HEADER BIDDING, OR PRE-BIDDING AS IT WAS SOMETIMES CALLED, HAS BEEN A PART OF THE PROGRAMMATIC CONVERSATION SINCE 2009. The practice was introduced by a few large publisher side adtech platforms to help publishers escape the pull of the waterfall and chart a more steady course.

A simple line of javascript inserted into publishers’ page headers (hence the name) allowed multiple simultaneous calls to different demand sources (exchanges or networks). Instead of dropping from one exchange to the next, publishers could share their inventory with multiple exchanges at once forcing them to bid against each other.

The highest bid on these impressions is converted into a key-value that is then prioritized within DFP. If the value is selected based on the publisher’s preset CPM requirements then the call will return an ad from the winning network. This sounds like a lot of activity, but the decisioning process normally takes place in 500 milliseconds or less and typically yields are higher CPM for the publisher than waterfalling.

Further ReadingThe programmatic waterfall mystery

HEADER BIDDING IS YOUR BARREL

06DIGIDAY | WTF is Header Bidding

For more information visit www.openx.com/headerbidding.

OpenX Bidder is the highest yielding header bidding solution used by publishers today. By providing access to one of the most powerful programmatic marketplaces in the world - the

OpenX Ad Exchange - publishers immediately experience increased competition from premium brands for their impressions. The results are dynamic bids and smarter decisioning

that help publishers optimize the value of every impression.

The highest yielding header bidding solution. Maximize every impression.

6DIGIDAY | WTF is Header Bidding

www.openx.com/header-bidding

07DIGIDAY | WTF is Header Bidding

SOUNDS GREAT, BUT DESPITE ITS PROMISE HEADER BIDDING DIDN’T REALLY TAKE HOLD WITH THE PUBLISHING MAINSTREAM UNTIL DYNAMIC ALLOCATION. This DFP feature put Google in the driver’s seat, giving the web giant’s AdExchange first dibs on direct-sold campaigns. Cherry picking cost publishers real cash.

Header bidding has emerged in that last three years as a counterweight to the growing influence of non-neutral servers, allowing publishers to bypass the advantage dealt to the buy side and bring other demand sources into play.

Further ReadingWTF is dynamic allocation

RISING ABOVE THE CURRENT

08DIGIDAY | WTF is Header Bidding

09DIGIDAY | WTF is Header Bidding

THERE’S MORE THAN ONE WAY TO APPROACH HEADER BIDDING. What started as a simple hack has spawned an array of solutions and tactics that publishers have to sort through in order to find the solution that works for them.

Floor Pricing

One of the great debates in header bidding is whether or not to set a floor price on impressions before you expose them to the open market. In theory a floor price protects publishers from hitting rock bottom and selling their inventory for less than it’s worth to them.

On the flip side, floor pricing also means losing out on the true efficiency of programmatic exchange where every impression is theoretically sold for it’s true market value. With a floor price there’s the risk, even in a header bidding environment, that

some inventory may go unsold if none of the exchanges being called in can cough up enough cash.

Jana Meron, VP of programmatic and data strategy at Business Insider, finds price floors useful to a point. “We’ve implemented it using the index wrapper. We have two bidders inside the wrapper. As far as the setup goes, they’re all basically everything’s competing together within DFP.”

Partners

Not all header bidding partners are created equal. Every integration is different, calling out to different demand sources and giving publishers differing levels of control. For some publishers a single header bidding partner is all that’s needed to generate a lift in revenue. But true programmatic efficiency is only realized when publishers reach as many demand sources as possible.

BARREL BUILDING

10DIGIDAY | WTF is Header Bidding

For many, this means implementing more than one header bidding partner to make sure they get the most bang for each impression. As far as revenue teams are concerned there’s nothing but upside to partner polyamory, but for ad ops teams juggling multiple partners means constantly managing multiple integrations. That means more labor and more resources spent wrangling code.

Jana Meron is sure that the rewards outweigh the hassle. “I’d like to have at least one if not two more partners in the header if we can. DFP has a line item maximum. So, we have to decomplicate our setup in order to add additional partners. We want to get to a point where we can do that.”

Wrappers

Wrappers are the layer of code that surrounds the header bidder tags publishers include on their pages. They’re used to pulling all header bidding scripts into place to make them easier for publishers to manage.

Every new header bidding partner a publisher takes on should add revenue to their programmatic yield. However, adding new partners also means adding extra code and complexity for ad ops teams. Wrappers make it easier to manage these complexities by bunding similar header bidding partners together. This solution should reduce the amount of integration headaches publishers experience.

011DIGIDAY | WTF is Header Bidding

12DIGIDAY | WTF is Header Bidding

WITH HEADER BIDDING SOLUTIONS PUBLISHERS HAVE BEGUN TO BUILT THE STURDY BARREL THAT WILL CARRY THEM OVER THE RTB WATERFALL IN ONE PIECE. But as with the fabled barrelers of yore, the vessel isn’t quite perfect. In fact, it may have a few leaks that need to be plugged before it can be considered seaworthy.

Latency Latency is easily the biggest boogie man haunting the header bidding revolution. Header bidding solutions might be good for publisher’s wallets but they’re also bad for site speed. Calls to multiple exchanges and other demand sources on every page mean slow load times on sites that would likely rather avoid it.

Ad blocking has cast a long shadow of anxiety across the media business. On the publishers’ side

that anxiety has manifested in increasing focus on user experience. Slow load times frustrate users and a growing number of those users are using ad blockers to tune out entirely. For most publishers, though, the rewards narrowly outweigh the risks .

Many are proceeding with caution, and taking steps to ensure that latency and load lag don’t spiral out of control. “All these partners allow you to do a global timeout for the auction.” said Dana Caputo director of programmatic at TEN, “So you can make that timeout shorter than the time that might return the most bids to maintain integrity of page load time. You would just have to cut that loss”

Malvertising The efficiency of multiple demand sources is hard to argue against, but opening the door to multiple partners isn’t without risks. Header bidding executions can leave publishers vulnerable to

POTENTIAL LEAKS

13DIGIDAY | WTF is Header Bidding

exploitative malware that can slip in along with ads. The risk increases exponentially with every new partner and exchange publishers add to their mix.

As with latency, the real danger in malware corrupted advertising–sometimes referred to as malvertising–is that, like latency, it risks damaging the publisher’s relationship with their audience.

Integration Header bidding doesn’t subscript to the tasteful adage of “less is more.” For header bidding, more is more. More partners mean more opportunities to bring home gold in the CPM Olympics. Unfortu-nately for ad ops teams, more partners also means more integrations with more technical headaches to iron out.

The technical lift of bringing header bidding to scale may be slowing down adoption, but it hasn’t stopped it. Publishers agree that the practice has merit but the technical challenges vary.

For Dana Caputo the challenge had more to do with the sheer number of sites under her purview. “It’s been a long integration process, but i don’t think that’s atypical. Especially because TEN has upwards of 60 websites, and some of them are on unique frameworks, which requires a unique integration for each website. It’s a lot of leg work and testing before we go live. But we have had some really good successes with it .”

14DIGIDAY | WTF is Header Bidding

HEADER BIDDING HAS BEEN IN THE AIR FOR YEARS--AT LEAST SINCE 2009 WHEN THE FIRST HEADER SOLU-TIONS WERE INTRODUCED BY MAJOR PUBLISHER SIDE AD TECH PLATFORMS. However, the practice has gained real traction over the last three years as ad revenue for digital publishers has slipped.

The advent of programmatic has been a mixed blessing for publishers, creating new levels of efficiency but also levelling off CPMs. The process has been accelerated by the proliferation of new digital inventory form rising publishers and new ad formats.

Header bidding is a partial answer to that problem. No publishers would go on the record with the exact amount of lift they’ve experienced as a result of header bidding, but off the record two major digital publishers cited a 4x lift in CPMs for the programmatic inventory.

An emerging crop of wrapper solutions aims to lighten the technical lift of header bidding. Meanwhile, a set of best practices for auction timeouts allows publishers to moderate the amount of latency they’re willing to tolerate. Taken together these forces paint a bright future for a simple DFP workaround that’s on the verge of becoming an industry equalizing standard practice.

LIFE BEYOND THE FALLS