IAB Blog: Header bidding: “A great yield management strategy for publishers”

the word programmatic over an outline of the world
Luke Fenney, VP, Publisher Development, at Index Exchange outlined why he believes Header Bidding is ‘great’ for buyers at the IAB UK’s Data and Innovation conference at the British Museum this week.

There has been a lot of discussion about header bidding in the last year – much of which has focused on the benefits for publishers.

However, header bidding also provides benefits for brands which want to reach more of their audiences via programmatic trading, Fenney claimed.

As more publishers adopt this new method of integration, the industry is starting to see the full capabilities of programmatic emerge, he said, in a presentation which served to outline how header bidding is fuelling growth in programmatic trading – and how buyers can benefit from this world in which “programmatic guaranteed” is becoming a reality.

What’s more, while many will have read the headlines proclaiming that the practice is driving up publisher ad revenue, it’s good for buyers, too, he said – pointing to three key reasons for this: firstly, more of your audience is now addressable via programmatic; secondly, programmatic guaranteed is now a reality; and, thirdly, bidding and auction dynamics are changing.

The practice also enables buyers to bid on 100% of publisher inventory, allowing for fixed budget deals, predictability of spend, guaranteed reach – and takeovers which leverage dynamic creative programmatically, he continued.

However, bidding and auction dynamics are in a state of flux with Fenney describing the ‘second price’ auction model as ‘flawed’.

He argued that header bidding makes the publisher – not the SSP –the decision-maker and called for a move to ‘first price’ auctions. He pointed out that this would allow buyers to ‘express their true intent, eliminate sub-optimal price manipulation and increase transparency and spend predictability’.

Index Exchange opened a UK office some 18 months ago and has seen header bidding rise in popularity ever since: “We believe we were influential in making it a popular topic and strategy for publishers … For too long impressions made available to programmatic have been what’s leftover. Programmatic has developed a lot over the past five years,” added Fenney.

Header bidding, he continued, means ‘less need for finance teams to chase money’ and less reliance on a single SSP, while also increasing overall yield. It allows intelligent allocation of impressions and increased fill rate and it’s now starting to see a lot more momentum.

Fenney concluded that header bidding is “letting us go to the next stage of programmatic” but admitted, too, that the bidding and auction dynamics ‘get a bit contentious’.

He went on: “Many will resist but we firmly believe these auction mechanics need to be changed to allow programmatic to continue to expand because header bidding is a fantastic yield management strategy for buyers.

“I encourage buyers to start talking to publishers. Talk to your SSPs or DSPs about the auction mechanics and come up with a model that works for the future.”

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