If you know me, you’ll already be familiar with the industry jokes about me being obsessed with header bidding. To be fair, I am. I genuinely believe it will change – and is already changing – everything about the way a publisher sells, and the tactics applied by smart buyers to access said publishers’ inventory and their associated audiences.
Spoiler: this is not another piece about how header bidding works as I am assuming you all know the basics already (if you don’t – it means a publisher running a unified auction and calling all demand sources at the same time rather than the traditional sequential approach referred to as the waterfall). What follows is a quick overview of everything you need to know today in order to sound like an expert when next on stage, or in front of your clients.
Iteration One: Wrapper’s delight
All SSPs and exchanges (Rubicon, OpenX, PubMatic, Index et al) used to compete with each other for a position within a publisher’s ad server (typically DFP). If they managed to secure a higher place than their competitors, this gave them a USP when talking to buyers. Many also used to negotiate for the ability to sell PMPs exclusively – another major USP if these rights were secured. For the SSPs that did not secure a priority position, they would ordinarily work with the publisher at a lower priority and may have been clearing open exchange inventory.
Fast forward to the age of header bidding, though, and publishers were removing tags on pages and opting to place SSP tags in their headers, thus completely flattening their waterfall and opting to call all SSPs they were working with at the same time before their ad server was being called.
What were Google offering to publishers at this stage?
Many claim header bidding was born out of a need to disintermediate the relationship between DFP and AdX, the Google-owned ad exchange. Google had made it very easy for a publisher to default to AdX in order to sell their inventory to programmatic buyers. Although fill was high due to the volume of buyers connected to Google, many claimed that eCPM was not as strong as it could have been with external competition competing and submitting a price before AdX had a chance to fill.
Google was quick to sense this growing wave of publisher sentiment and witnessed first-hand how many of their publishers were implementing independent header tags from 3rd parties and that was hindering their ability to win the auction. As a result, Google very quickly released a beta known as Exchange Bidding in Dynamic Allocation (EBDA). For the first time, this enabled third-party SSPs that were included in the launch beta (Rubicon and Index) to compete at the same level as AdX when the dynamic allocation feature was selected by DFP publishers. We will return to Google later, but first…(Continued…)
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