Header bidding has perhaps been one of the buzziest terms of 2016 with players like Amazon, Google and Facebook in the game. Here’s a look at why that buzz is perhaps justified – and why header bidding is more than just an inventory accessibility play.
According to Chris Copeland, president of adtech platform Yieldbot, header bidding is an integration into the header of a publishing site that allows a publisher to open up ad inventory in an auction to multiple potential buyers at once.
“The big evolution is the old model was a waterfall where one after the other after the other, potential buyers [had access to inventory],” Copeland said. “Adtech or media companies or brands directly would go one by one and decide if they wanted a piece of the ad inventory. The big shift with header bidding is it allows publishers to have a greater ability to monetize and create yield by opening [this] up across multiple spaces.”
And while he conceded header bidding is an inventory accessibility play at its core, which is not necessarily the most interesting topic in marketing, what IS interesting is that it changes the dynamics of how publishers can monetize their sites as they “start to provide a better user experience and hopefully usher in a real wave of real valuable interactions between brands and consumers that publishers make possible.”
In fact, Justin Festa, executive vice president of digital at publisher LittleThings, said header bidding solves a lot of problems in the industry tied to the inefficient waterfall system in which publishers had to go from Advertiser A to B to C and lost impressions along the way and it became more difficult to understand where original impressions came from, which led to more fraud.
“What header bidding does is instead of going from A to B to C, you go to all [potential advertisers] at once and everybody knows where the impression started and you can verify where [it] came from,” Festa said. “It’s contextual information that allows all bidders to submit a bid at the same time and increases the yield for publishers and increases transparency for advertisers and helps clean up ad fraud because transparency is greater.”
This is also important because this is an industry incessantly talking about ad blocking and the quality of the user experience, Copeland said.
“I believe everyone in the ecosystem has to deliver on that promise of a great experience or it all falls apart and they’ll talk about adblocking a lot more than they already are,” Copeland said. “Publishers need to make money and brands need to talk to someone motivated and customers have to get relevant experiences. Yieldbot’s view is that we can go through header bidding as a concept and deliver on that, which is important as the space goes forward. We need to get past consumers who don’t want to see ads and concerns about transparency and fraud. The only way is if you value every part of the ecosystem, which is what header bidding makes viable.”
Further, Copeland said header bidding is not boring because there’s an opportunity to get paid for creating really good content and for users to actually get ads that mean something to them.
“Functionally, it’s as boring as any other technology implementation, but what it should ultimately deliver is better advertiser-consumer-publisher engagement and that’s the part this space should get excited about,” he added.
Case in point…
LittleThings, which publishes content for women, recently used Yieldbot’s header bidding technology and saw a 20% revenue lift.
Festa said LittleThings saw a lift in revenue from the first day.
“Things worked well. We’re happy with the technology and the partnership…that led us down the path of ‘If we can do this with Yieldbot, can we do this with another company or another advertiser and increase [revenue] even more?’” Festa said. “Ultimately, in order to do that and keep the user experience we had, we needed to use another bit of technology that Yieldbot had called Pubfood. We utilized more technology to add other advertisers to the page and in doing that we were able to see a 20% lift across our display inventory utilizing multiple header bidding partners.”
LittleThings has been working with Yieldbot for about a year and with Pubfood specifically for about six months, Festa said.
With header bidding, publishers get more intelligence about the context and the value of ad slots and because they are able to monetize that better, they can think about reducing the number of ads on a page because they can better profit off of fewer ad slots, Copeland said.
“From Yieldbot’s point of view, if you understand the intent and motivations of consumers inside the header, you can look at having three slots instead of five, which allows for more competition and you can make more money for those slots and then because of who they allow in to the header, you can pick partners that will give a better user experience,” Copeland said.
Indeed, Festa said LittleThings’ desktop experience has an average of about two ads per page, which it is able to do because of header bidding.
“We generate more from less placements and to put that into context, if you have the old system where you go to Advertiser A first and try to fill the impression…you don’t care about the quality of the impression,” Festa said. “Advertiser B might have a beautiful car ad, but the user in the past never [saw] it even if the publisher would make more and it would be a better experience. Header bidding allows us to generate more per ad placement.”