Is Header Bidding Dead?

Header bidding is dead. Header bidding must be open source. Header bidding hurts buyers. Header bidding is behind global warming...

There’s a tremendous amount of FUD (fear, uncertainty and doubt) about the viability and utility of header bidding, which can be attributed to the fact that header bidding is a new and disruptive technology created by the rise of programmatic advertising and made necessary by market leader stagnation and refusal to adjust to the realities of market demands.

Google’s recent announcement to open up its Dynamic Allocation product to outside demand partners caused much discussion about the ‘death of header bidding,’ but what Google launched is effectively a server-side container tag for DoubleClick for Publishers (DFP). This is what we at PubMatic, along with several others in the industry, are offering. The reality is header bidding is not going away and what began as a hack to open up a closed Google DFP/AdX link to the broader programmatic ecosystem that publishers and advertisers want to access, has evolved into an enterprise-grade solution with granular controls, latency settings, scheduled reporting, analytics, etc. The real question is not ‘is header bidding dead?’ but instead ‘why did it take Google so long to allow outside exchange bidding into Dynamic Allocation,’ and, more importantly, ‘is what Google is offering now truly a fair and transparent header bidding solution?’

We at PubMatic are committed to serving the publishing industry and are constantly exploring new ways to help the industry thrive in an increasingly programmatic world. Our holistic Wrapper Solution and server-to-server header tag integrations are just two of the ways we support publishers’ programmatic strategies. As a part of those efforts, we are participating in Google’s pilot Exchange Bidding in Dynamic Allocation (EBDA) program in order to learn more about how Google’s program works and to provide our premium publishers clients with the utmost flexibility in their ad serving and header bidding operations.

However, while we are supporting the EBDA pilot, there are some open questions about the product. First, publishers should ask themselves whether EBDA will treat exchanges equally? For many publishers, a level playing field among exchanges is critical to attracting and executing on the highest possible bids. To that point, what tools will publishers have to audit DFP to make sure their exchange partners are getting the same treatment as Google’s Ad Exchange?

Second, PMP support in EBDA is unclear. Publishers utilizing PMPs will still require an independent PMP technology provider. Header bidding has evolved beyond the desktop RTB support of EBDA, into PMP, PMP-Guaranteed, rich media, mobile and video. This device and format flexibility has paid off, as PubMatic’s Q1 2016 platform data shows that publishers with header bidding enabled saw a 53% increase in CPMs compared to non-header bidding enabled publishers.

Third, Google’s “First Look” header bidding product only supports Google Ad Exchange, meaning EBDA partners will be locked out. One of the key value propositions of any enterprise wrapper solution is the ability to source high CPM bids that can compete at any priority within the ad server stack. First Look exclusively allows Google’s demand to compete for those impression opportunities. Effectively, First Look allows Google to keep their thumb on the scale, while claiming openness through EBDA. Publishers should understand how they are affected with these games of bait and switch.

The needs of the publishing industry are changing at a dynamic pace. Header bidding has evolved to container tags, all of which have demonstrated to publishers that independent technology can address unique inventory management needs and yield significant positive results. Previous approaches were biased and rife with inefficiencies that were exposed by header bidding, which reinforced the value of independent solutions. While Google’s pilot EBDA program claims there will be full transparency, we believe the publishing industry has already seen the benefit of solutions that sit outside of Google’s platform and puts their monetization efforts first while maintaining their independence.

By Paul Gubbins, PubMatic, UK managing director, with input from Evan Simeone, PubMatic VP product management

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