Interviews, insight & analysis on digital media & marketing

Is header bidding the driving force to creating a fairer ad ecosystem?

By Piero Pavone, CEO, Preciso

The cookie landscape is set to look very different next year – like it not, ready or ill prepared, change is coming. As the industry shifts away from a reliance on platforms such as Google Chrome, everyone from publishers and ad servers to brands and media agencies, is recognising the need to share first-party data.

First-party data allows for a more transparent ecosystem. In fact, it’s a prerequisite for technology partners if they want to work with clients across other browsers. But more than that, it complements the emerging shift in adtech, in which many platforms are becoming more of a hybrid solution, bridging the gap between the DSP and SSP. 

This new wave of tech providers, who are able to buy traffic from publishers and access their inventory directly, removes unnecessary bidder decisions and associated costs from the ad exchanges who sit in the middle of the supply chain – thus enabling a fairer bidding system.

This shift is also underpinned by new improved programmatic bidding technology: header bidding. 

Time to get smarter with header bidding

Traditional bidding models, known as waterfall auctions, are generally thought to be a fragmented and inefficient way of carrying out programmatic advertising, largely because they only offer impressions to one bidder at time. This means the bidder that comes in with the right price first automatically wins the bid, and everyone else loses out, even if they are a better match.  

Header bidding is a response to this outdated approach and was created to break down the monopoly held by today’s major walled gardens. It lets all partners bid simultaneously, so that anyone who bids under the auction price floor has a fair chance of winning that impression. It also means that publishers can receive bids that may be unavailable through their primary ad server.

A big boost for advertisers

The key benefit for advertisers is that smart bid technology only buys impressions that deliver results. Firstly, with header bidding, adtech platforms can ensure brand campaigns deliver every time, while helping them save on cost in the process. 

Secondly, smart bid technology uses rich customer journey data and deep learning to optimise the serving of dynamic creative ads. By predicting customer behaviour, it can automatically calculate the optimal value of placements in real-time bidding marketplaces according to a number of specific criteria. These include time (is it the right time to engage?), user (is this the user most likely to engage?), and content (is this the creative that will resonate most?). 

And all of this happens within a millisecond. 

Less really is more 

This type of bidding technology is causing a complete shift in mindset because it allows tech partners to make better, quicker decisions on behalf of their clients. Most DSPs seek to spend an advertiser’s total monthly budget, which can lead to significant wastage on impressions that simply don’t perform. 

But with heading bidding, tech platforms can help advertisers tackle the issue of ad redundancy head on – they can set campaigns to only bid on placements they know will have the best propensity to convert, even if it means only spending 20-30% of an advertiser’s budget. 

By focussing on smarter targeting and buying relevancy, rather than scale, campaigns will perform just as well, if not better, at a fraction of the cost. 

Prebid paves the way for publishers 

So how can we close the gap between the buy side and the sell side? Today, we are seeing the emergence of open source platforms – such as Prebid – which can be integrated into a publisher’s own system, while also being accessed by all of their SSPs. 

Unlike traditional bidding systems, which are housed within walled gardens such as Google Ad Manager, having this central, open layer where all SSPs are in competition with each other creates a much fairer and more transparent bidding system. 

Prebid acts like a community that allows ad tech partners to access the open code inside publisher sites, and crucially, make those all important real-time bidding decisions without involving a middleman – a win-win for both advertisers and publishers.

As we head towards a cookieless world, it’s refreshing to see the advertising industry working together to build a fairer, more competitive bidding model. Through the emergence of powerful smart bid tools, as well as open source header bidding platforms, both advertisers and publishers can rest in the knowledge their campaigns are working as hard as they possibly can.


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