The network waterfall model has been losing ground to header bidding – and for good reason. The last two years have proven that header bidding brings yield gains averaging 20-40%. However, many small and mid-sized publishers are yet to implement the technology. Why is that?
Header bidding was supposed to help democratize digital advertising. By cutting out network middlemen and having buyers bid directly on their inventory, publishers were going to maximize the value of every impression and see quick gains in yield.
At least, that was the theory. In reality, too many small and midsized publishers can’t get access to header bidding. They do not have the resources to build a wrapper themselves, and they are not big enough to have a Supply Side Platform (SSP) build it for them.
The Adtech Catch-22
Header bidding is the solution to the network waterfall problem, but publishers need to be prepared for a significant technical challenge. They either need to build a header wrapper themselves, which means committing significant engineering and ad ops resources, or they need to find a partner that can build it for them.
SSPs like IndexExchange, AppNexus, and Rubicon will help publishers build a wrapper, but most tier one SSPs won’t engage with a publisher that has fewer than 50 million monthly ad impressions. This is the ad tech catch-22 – most publishers aren’t big enough to build their own wrapper, and they also aren’t big enough to have an SSP build it for them.
Even when a publisher does creep above the minimum requirement, we hear that SSPs are hardly fighting for their business. Tier one SSPs are too busy chasing tier one publishers. Frequently this means small and midsized publishers are left out in the cold.
A Missed Opportunity
The reason behind this is simple: big publishers are more profitable for tier one SSPs to work with – especially if the SSPs are offering a bespoke, high level of effort wrapper solution.
We think this logic is shortsighted. Small and midsized publishers collectively represent vastly more inventory than tier one publishers, and in the long run are a far greater opportunity. Ignoring them isn’t just a nightmare for long tail publishers, it’s also bad business.
How to get it Right
Header Bidding tech vendors need to start focusing their attention on smaller publishers. We need to do more to educate them about why they should switch to header bidding, we need to guide them along the way, and we need to build long-lasting and mutually beneficial partnerships in the process.
Most importantly, if as an industry we build wrapper solutions that do not require such a heavy technical lift (as we have at Adtelligent), then we can open up a tremendous amount of inventory to the yield improvements and efficiencies of header bidding. This can also help ensure that high quality, niche digital publishers have a viable business model.
This innovation will help the buy-side as well as the sell-side. More quality supply and more niche audiences mean more opportunities to run campaigns at the most efficient CPMs. The largest publishers may see some yield pressure due to the increased supply, but this is a necessary trade-off if we are going to have a viable long tail in digital publishing.
Diego Sanchez, CEO, Adtelligent Inc.