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1 Page: OpenX ©2016 | All information is proprietary and confidential. Header Bidding Advantages for Ad Buyers Unlocking First Look Value Presenter: Natrian Maxwell | All information is propriety and confidential.
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Page 1: Header Bidding Advantages for Ad Buyers - OpenXwelcome.openx.com/rs/745-BUQ-779/images/OX_HeaderBidding...Header Bidding Over 17 platforms offer a Header Bidding Product 98% of header

1 Page: OpenX ©2016 | All information is proprietary and confidential.

Header Bidding Advantages for Ad Buyers Unlocking First Look Value

Presenter: Natrian Maxwell | All information is propriety and confidential.

Page 2: Header Bidding Advantages for Ad Buyers - OpenXwelcome.openx.com/rs/745-BUQ-779/images/OX_HeaderBidding...Header Bidding Over 17 platforms offer a Header Bidding Product 98% of header

2 Page: OpenX ©2016 | All information is proprietary and confidential.

Today’s Agenda

Introduction to Header Bidding

Get started with a high level analysis of header bidding and an end to

end overview.

Optimizing Your Buys

Learn about the advertiser benefits and incremental

value from accessing header impressions.

Extending Audience Reach

Explore new ways to reach new consumers through

existing technology capabilities.

The Future of Header Bidding A forward look into the

innovation and breakthroughs coming down the pipeline in

2016 and beyond.

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3 Page: OpenX ©2016 | All information is proprietary and confidential.

Part I: Introduction to Header Bidding

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4 Page: OpenX ©2016 | All information is proprietary and confidential.

What is Header Bidding?

HEADER BIDDING is an integration on the publisher’s page that exposes each impression to programmatic demand before calling the publisher’s ad server. This means advertisers can dynamically compete for more of a publisher’s inventory in real-time and can see higher quality inventory within their ad stack.

<header script>

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•  Access to more of a publisher’s high quality inventory. •  Access to a publisher’s reserved inventory with the ability to win

impressions.

•  Greater inventory scale increases audience reach

•  Access to increased viewable impressions

•  Key Takeaway: Advertisers leveraging header bidding inventory are exposed to higher quality impressions, with greater reach, increased viewability and higher priority within the publisher’s ad server.

Header Bidding Demand Side Benefits

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6 Page: OpenX ©2016 | All information is proprietary and confidential.

Market Snapshot

1

2 3 4

5

53% of Large Publishers Are using

Header Bidding

Over 17 platforms

offer a Header Bidding Product

98% of header bidding

auctions are completed

In less time than tag based.

97% of publishers use multiple Header

bidding platforms.

Over 70% Of all

publishers are using header

bidding solutions

Key Takeaway: “Header bidding is not just a fad, but a proven integration method that benefits both buyers and sellers. The industry is seeing triple digit growth YoY related to market adoption.”

Including: Appnexus, Rubicon, Index, AOL, Yieldbot, Pubmatic, Pulsepoint, CPXi

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7 Page: OpenX ©2016 | All information is proprietary and confidential.

Exchanges in the Space

What distinguishes each player

1

2

Participation Rate

Publisher Reach

3

4

Channel Access

Priority and Access

•  Defined as the number of bids that make it into a publisher’s ad server to compete for an impression.

•  Industry avg. is 30% and OpenX’s PR% is 90%.

•  Total market coverage and access of premium publishers within an SSP.

•  Criss channel support for header bidding. •  Mobile, Display, Video.

•  Publisher priority within the ad server •  Sponsorship level penetration and access to top

funnel impressions.

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Refresher on Ad Server Line Items

Direct Deals

High Value Demand

First Look PMPs

All Other Programmatic

•  Highest Priority •  Guaranteed/Direct sold campaigns •  Pacing, flight dates •  No impression goals •  Not driven by bid price

•  Could be Direct or Non-direct Sold •  PMP is normally trafficked here •  Influencers are Flight Dates and

impression goals •  Price or Priority can be decision drivers here

•  Non-guaranteed campaigns •  Driven only by $$$ •  Highest bid wins •  Most Exchanges and Networks are

configured here

*This uses DFP as an example

Sponsorship

Priority 1 - 4

Standard

Priority 6 - 10

Exchange, Network, Bulk, Price Priority,

House

Priority 12-16

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9 Page: OpenX ©2016 | All information is proprietary and confidential.

How Bidder Works

User visits page with OpenX Bidder implemented

01 Bidder script directs ad request to the OpenX Ad Exchange to determine impression value

02 DSPs, consisting of various buyers, simultaneously bid on the impression

03

Highest bid is inserted in the ad request and is passed to the publisher’s ad server

04 The highest price wins the impression and the ad is served

06 Ad server has a list of all line items eligible for the ad request, including the bid passed from OpenX Bidder

05

<header script> <header script>

Ad Server Ad Server

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Auction Scenarios

1Reserved line Item needs the impression

2Reserved line item may or may not need the impression

3Reserved line item does not need the impression

•  Reserved line items are not impacted by bid price. •  Line items are created based on fill goals and impression goals. •  If an impression is needed to fulfill a reserved campaign goal, the impression is allocated

automatically to the needed line item. •  Exchanges will not have a chance to win the impression.

•  DFP creates a temp CPM based on the reserved line’s current progress and sees if an eligible non guaranteed line can beat the temp CPM without interfering with the reserved line’s pacing goal

•  If the temp CPM is beaten, the Non Guaranteed line items can compete for the impression •  If the temp CPM is not beaten, the reserved line takes the impression •  Ad Exchange would need to beat both the reserved temp cpm and the non reserved cpm to win

•  If the reserved line does not need the impression, this inventory is sold to the highest bidder

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Dynamic Allocation Settings Dynamic Allocation

DisabledDynamic Allocation

EnabledEnhanced

Dynamic AllocationExchange Bidding

Dynamic Allocation•  When dynamic

allocation is disabled, line items can only compete within the same set of line item priorities.

•  The publisher’s ad server will cycle through line item priorities until one is selected to serve. The highest priority will take precedence over lower priority line items.

•  Standard Waterfall setup. This is the only configuration where line item priority matters.

•  Publishers have the ability to allow non reserved (6-16) line items to compete across priorities. Excludes reserved line items.

•  In this type of setup, if a publisher receives a bid for $2.00 on a priority 6 line item and a bid of $5.00 on a priority 12 line item, the $5 bid would win the impression despite the lower priority.

•  This is the most common configuration in publisher ad servers today.

•  Publishers have the ability to allow non reserved and reserved line items (1-16) to compete without compromising reservations.

•  In this type of setup, the publisher has the ability to offer reserved impressions through programmatic pipes without impacting the pacing or impression goals for reserved campaigns.

•  Dynamic allocation that allows external exchanges to compete for impressions within DFP.

•  This is DFPs solution to an all inclusive product that reduces the need for external header bidding partners.

•  Currently in beta with a handful of exchange partners, including OpenX.

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12 Page: OpenX ©2016 | All information is proprietary and confidential.

Part III: Header Bidding Challenges

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Metrics Dec 2014 Dec 2015 Change

Bid Requests 116B 199B + 42%

Bid Responses 480B 1T + 61%

Average CPM $1.40 $1.70 + $0.30

Win Rates 4.2% 3.4% - 0.8%

Increase in Premium Placements

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14 Page: OpenX ©2016 | All information is proprietary and confidential.

2nd price auction and Header Bidding

Due to the nature of Header bidding and the process of passing the winning bid into a publisher’s ad server to compete against reserved line items and sourced demand, the second price auction is not the most effective method for delivering the highest advertiser performance. Here is why: During a 2nd priced auction, the highest bid is reduced in 2 instances before being passed into the publisher’s ad server.

Advertiser 1 $10.00

Highest Bid

Advertiser 2 $2.00

2nd Highest Bid

OpenX Fee 20%

Final Bid Amount $1.81

Bid reduction $2.01

Publisher Ad Server

= A competing bid

$3.53

$9.00

$7.00

$5.00

1 2

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Limitations of Header Bidding

New Bidding Strategy

Increasing Complexity

New Product Needs

•  Publishers are using multiple header bidding partners to increase competition and increase yield.

•  DSP partners are now receiving several

impressions for the same opportunity across multiple exchanges without seeing an increase in value.

•  As a result, advertisers and execution

platforms are looking for ways to be better informed about the value of header bidding impressions.

•  New algorithm logic and impression signals will need to be created and ingested to address Header bidding’s new buying model.

•  2nd price models remain, but are also the

primary cause for low win rates. Media buyers will need to strategize with exchange partners to solve for this.

•  The traditional sense of RTB ROIs will

need to be rethought and adjusted due to an increase in valuable impressions. (CPMs)

•  Digital marketplaces are becoming more competitive as publishers have combined their demand partners into a single marketplace.

•  Private marketplaces will become

increasingly more important for advertisers hoping to achieve ROI goals.

•  Advertisers who move higher up the

publisher’s ad server priority will have an advantage over traditional remarketers leveraging solely an open auction to reach users.

Key Takeaway: The adoption of header bidding is bringing forward some market challenges with the current auction mechanics and bidding algorithms. While header bidding is a new method of extracting value, product innovation will need to develop on both the demand and supply side to unlock all the value within this new buying model.

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Part II: Container Tags

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Defined: Container tags are the framework or containers for multiple header bidding integration partners. 1 single container tag is placed in the publisher’s header instead of multiple demand sources. There are currently 2 types of container tags available in the marketplace: 1.  Browser- Side – The majority of market solutions are built using the browser. Instead of multiple demand

sources sending and processing requests, a container conducts the auction and responds back with the highest bid.

2.  Server-Side – There are only 2 solutions in the market that are server side today. OpenX’s Meta and

Pulsepoint’s Bidder Express. A server solution transfers the processing and activity from the user’s browser to the container’s server for the heavy lifting and load processing.

Container tags solve 3 challenges for publishers leveraging multiple header bidding solutions: 1.  Reduces complexity by adding standardized rules and configurations within the auction place. 2.  Simplifies onboarding demand partners for publishers working with multiple solutions. 3.  Creates unified reporting and insights across multiple header bidding partners.

Container Tags Defined

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Container Tags Server Side vs. Browser Side Browser Side Container Tags Server Side Container Tags

•  Browser side tags are referred to as mediation tags as they sit in between the advertiser and publisher’s ad server.

•  While combining all partners into a single solution for workflow efficiency, Load times and latency remain present as all activity is still performed in the browser.

•  Transparency poses a challenge with demand partners as container solution providers are also participants in the auction place and have a vested interest to serve their own sourced demand.

•  Participants in the container solution are required to wait for all participants to submit a bid, before any bid can be passed to the publisher’s ad server.

•  Server side container solutions can either be configured as mediation layers or direct connections into a publisher’s ad server.

•  All auction activity is conducted out of the browser and hosted on the container solution’s technology for a faster and more efficient integration.

•  Transparency remains a challenge within the server environment as well for the same reasons mentioned on the browser side.

•  Timeout windows can be configured individually by advertiser thus eliminating a dependency for all participants to submit a bid before completing an auction.

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s

Header Bidding is still evolving, but is here to stay

•  New signals and methods of enriching inventory are still developing.

•  New methods of integrating multiple header bidding partners, such as a server-side container, levels the playing field and increases win rates for buyers.

•  Supply-side platforms and demand-side platforms will need to join

forces to tackle some of the friction points that arise from new methods of accessing and buying media.

Header Bidding enhances the demand side •  Header bidding matches supply to demand more efficiently. CPMs are

increasing due to header bidding introducing higher value inventory into the programmatic marketplace.

•  Header bidding combined with audience forecasting and volume

guarantees (Real-time Guaranteed) gives buyers sponsorship level access and the ability to compete for any impression a publisher has.

Not all Header Solutions are created Equally •  Publisher line item prioritization will vary across each exchange.

Demand partners should ask where each exchange is positioned. •  Participation rate is the key metric that demand partners should be

aware of when deciding where to allocate budgets.

The Wrap Up Key Takeaways

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Thank you

WEBSITE www.openx.com

PHONE +1-855-OpenX-4U (US Sales) +44-800-587-3690 (EU Sales)

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