Header bidding is not waterfalling

Myths that remain unchallenged over time become truths. Integrating header solutions is not recreating a waterfall or 'waterfalling'. Not even close.

Waterfalling is a unidirectional process that was developed in attempt to create an auction style process. Where the programmatic waterfall method falls short of a true auction definition is found in its set up: simple groups of buyers taking what they want, then passing on to another group of buyers instead of allowing the groups of buyers to directly compete. Waterfalling or rather 'daisy-chaining', is not a true auction. In this pseudo-auction, buys are typically comprised of blind buys, wide net casting, minimal control, unknown pricing, masked inventory, little transparency.

Imagine how inefficient this daisy chaining environment is today?

(Waterfalling or daisy chaining happened here in Open Marketplace for years)                                                                   

Now envision a process where all inventory is unified upfront at the same time. Let's say like a Christies or Sotheby's auction.

Over the last year the header bidding phenomenon has taken the industry by storm; header bidding is an advanced integration where publisher can offer inventory to multiple exchanges where buyers are searching and transacting at scale. The idea is that the buyers can access more opportunities of all kinds, and pay a fair price, resulting in the publisher and buyer increasing all yield, including premium. Header bidding effectively eliminates the inefficiency of daisy-chaining and is a cleaner integration between all partners.

(Header integrations are more like well-lit paths)

Myth: Waterfalling provides publishers with the same yield opportunities as header bidding. Myth: Header bidding is recreating an ad network model.

When challenged these statements fall flat, having no merit whatsoever, proven false based on technical discrepancies like control, price transparency, deal transparency, guarantees and so on.

What header integrations really do is create paths for prime deals and create a true premium marketplace auction. Integrations work more as paths where buyers and sellers have choice, can test campaigns and throttle actions and deals as needed. A lot like deciding whether to take the freeway home, pay to access a toll road or the neighborhood backroads, options and needs often determines the difference or path the driver chooses. The difference is also destination access, capacity of each roadway and exit options, influencing a drivers navigated route.

Myth: You can’t run multiple header bidding integrations simultaneously.

The truth is multiple header bidding partners can be integrated effectively. It requires a proper publisher set up, lots of testing and a system to manage several partners simultaneously or it's not a real auction. What good is an auction if just one person shows up? Markets develop better with responsible and healthy competition, especially with fair rules for all.

Now that I’ve cleared up the myths connecting waterfalling and header bidding, I’m setting a solid foundation for how exactly header integrations are benefiting publishers today. No more myths.

Header bidders are changing publishers' overall monetization strategy by reimagining inventory opportunities. The technology also provides publishers with the ability to improve user experience by controlling the ad serving process.

When a publisher can reimagine its inventory landscape, it unlocks undiscovered potential. Publishers can unify inventory under one group of technologies, gain better control and lower resellers of their inventory. Pubs can increase their expertise and resources around managing all classes of opportunities. Buyers are yearning for better dialogue, conversations and testing with sell side partners. When buyers have better options and can plan, test, execute and optimize their buys in better ways – that leads to positive relationships. It also increases accountability for publishers. Relying on intermediaries to troubleshoot, fix or make changes leaves room for error and slow fixes.

As a practice, header bidding is accelerating the enormous shift towards marrying traditional direct sales strategy with yield management – it is an effective approach. It's helping companies to finally redefine and move away from antiquated terms like direct vs indirect and abandon words like remnant. Publishers cannot manage and look at their inventory this way anymore.

Header bidding is also behind the evolution of operations, driving yield, ops, Sales and developers to unify thinking behind the same effort. Now there are more blended skillsets, mixed teams, joint goals and this creates agility. If everyone is moving in the same direction, you can shift easily when needed – changes happen often, we know this is the only constant now. This alignment of traditionally separate groups like developers, operations, sales and marketing become one. Looking ahead, revenue operations focused developers will be the next area of growth for publishers.

Rebuilding community and relationships for both buyers and sellers

The truth is that header bidding has brought buyers and sellers closer together. Premium buyers have been public about paying more for a more direct like transaction. One of the hardest things for a buyer is understanding price so they can and execute and then do more or less. – still without traditional paper involved.

The best thing about buyers is they tend to speak with their transactions. Their words come in the form of bids, attempts, wins, loses and pricing. These are signals, hand raises and new forms of outreach to us as publishers. Bring the right roles to the table like ops, yield, dev and sales and cut through the back and forth. As a publisher set yourself up right and you can actually have real conversations around buyer needs.

Buyers want to understand specifics on price, opportunity, so they plan and execute at scale on guarantees and volume. Unlock premium inventory like large canvass units, rising stars and premium inventory. Help them find what they want, reduce friction, both buyer and publisher can create long-lasting partnerships.

Waterfalling couldn’t do the above. Let's give credit to those old waterfalling partners. It served its purpose and many made money. All sides were satisfied in some way for years - but it has changed significantly and it is not the same. There are many emotional and psychological aspects to accommodating this new framework for deals and relationships.

Headers are now recognized for significantly improving areas like ad quality and user experience. In the days ahead many will continue to stamp out lower quality advertisers who can’t compete in premium based environment and eventually kill “remnant”. With proper implementation and strategy, headers make all things equal and all things premium – every last impression.

Advertisers, agencies, buyers, planners, pubs, sellers, ops and developers – take time to work closely with your tech partners and challenge false statements. Major agencies and buyers are making big plans around implementing header integrations as part of their programmatic direct strategy. It’s time to challenge the myths and uncover the truth.

Erik Requidan is vice president of sales and programmatic strategy at Intermarkets. He tweets @Requidan

Get the Newsletter

Keep up to date with the latest news and insights.

Subscribe
ER

Erik Requidan

All by Erik